Funding mobilised from the US CHIPS and Science Act will be used for a new programme to fast-track capacity for semiconductor assembly, testing, and packaging in Latin America.  

On 17 July, US Secretary of State Antony Blinken, in collaboration with the Inter-American Development Bank (IDB), announced a new programme at the Americas Partnership for Economic Prosperity (“Americas Partnership”) ministerial plenary meeting in Washington. This initiative seeks to expand semiconductor manufacturing capabilities in countries from the 12 Americas Partnership, beginning with Mexico, Costa Rica, and Panama, with support from the International Technology Security and Innovation (ITSI) Fund. The ITSI Fund, appropriated under the CHIPS Act, allocates US$500M to the Department of State (US$100M annually over five years beginning in 2023) to support new programmes and initiatives with US allies. 

The IDB will facilitate public–private investments and partnerships to enhance the semiconductor ecosystems in these countries. The programme aims to establish large-scale assembly, testing, and packaging facilities to complement and sustain orders for chips produced in the USA. 

Recently, the USA approved multiple contracts with semiconductor giants, including Samsung, TSMC, Intel, and Micron. These contracts involve billions of dollars in loans and grants for the construction of high-end chip-making facilities on US soil, particularly in Phoenix, Arizona, which is emerging as a major semiconductor hub. 

Despite these domestic investments, the USA still needs to recognise the necessity of sustainably sourcing raw materials, including silicon, tantalum, germanium, and gallium, as well as intermediate products used in the manufacturing process. Addressing this will be crucial for the USA to maintain a competitive stance in the global semiconductor industry.