Brazilian government negotiates attraction of Samsung chip factory

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The governments of Brazil and South Korea signed a memorandum of understanding to join efforts in favor of attracting a chip and semiconductor factory to be installed here. The negotiations revolve around Samsung, one of the world leaders in the segment.

The information was shared by the Minister of Communications, Fábio Faria, in an interview with the press during the 5G.BR Seminar, organized by the ministry itself. “We have a memorandum of understanding with the government of South Korea. “They are talking to Samsung about the possibility of creating a hub in Brazil,” said Faria.

The idea would be to build a factory capable of producing parts that can supply the local industry, especially the automotive industry, as well as being exported to countries in Latin America, Europe and Africa. “Brazil is a strategic point for this”, he explained. If confirmed, the construction of the industrial plant would be the responsibility of the private sector, with possible tax benefits to be offered by the State where the unit would be headquartered. But for now, there is nothing concrete.

The minister commented that the chip and semiconductor market depends a lot on production in Taiwan, which is going through a phase of geopolitical tensions with disputes between China and the United States, which reinforces the need to seek alternatives to guarantee the supply of inputs.

The problem, however, is not new. This is a market gap that has been dragging on for several months in the face of the global crisis caused by the Covid pandemic and, later, the war in Eastern Europe – factors that affected the logistics chain around the world.

In addition, the arrival of the fifth generation mobile internet (5G) will also open up the market for the so-called “internet of things”, that is, communication between devices – which will increase the demand for chips and semiconductors in the coming years.

Faria said that he also sought dialogue with Intel for the installation of a unit in Brazil. According to him, the company would have replied that it sought the Brazilian government years ago, but did not reach an understanding. With that, Intel opened its factory in Costa Rica — that was back in 2008.

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State-owned liquidation

Despite the supply crisis, the government of Jair Bolsonaro ordered the liquidation of the Center for Excellence in Advanced Electronic Technology (Ceitec), a state-owned company that was the only producer of chips and semiconductors in Latin America.

Based in Porto Alegre, Ceitec was created by law in 2008, still in the government of former president Luiz Inácio Lula da Silva. The idea was to have a large national manufacturer in the sector. The problem is that the company has always been dependent on the National Treasury — that is, it needed resources from the public coffers to pay current expenses and salaries.

Without making a profit and considered inefficient, the state-owned company became the target of the current government, which announced an extensive list of privatizations. In 2021, the Investment Partnerships Program (PPI) recommended the extinction of Ceitec, and the presidential decree that made the decision official was published in December last year.

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