Let’s start the new year with a quick recap of some of 2022 events and trends. A year marked by three significant anniversaries – the transistor, the microprocessor and AlexNet turning 75, 50, and 10, respectively – 2022 was also characterized by a dramatic and unexpected change of the global geopolitical and economic climate. War in Ukraine, the spike in energy prices, and inflation shaped a new scenario.
From chip shortage to capex drop
At the beginning of 2022 “the” problem was the chip shortage forcing several carmakers to halt their assembly lines, with governments asking foundries to increase capacity. Just a few months later, several chipmakers cut their planned capital expenditure citing weaker consumer demand. Among them Taiwanese foundry UMC, and South Korean memory maker SK hynix, which decided to cut its investment next year by more than 50% due to the deterioration of the memory market conditions. Market research firm IC Insights forecasts a -19% drop in total worldwide semiconductor capital industry spending in 2023.
An unprecedented amount of subsidies
In 2022, the escalation in geopolitical tensions – especially between the U.S. and China – prompted governments around the world to subsidize their domestic semiconductor industry, with the goal of gaining independence. An unprecedented amount of taxpayers’ money is set to benefit qualified applicants over the next few years: $52.7 billion in the U.S. (CHIPS and Science Act), $45 billion in the European Union (EU Chips Act), $10 billion in India. Adding to this, the Japanese government will subsidize the newly established Rapidus chipmaker company. On the other side of the barricade, China is reportedly working on a $143 billion support package for its semiconductor industry. As for the U.S., 2022 saw the birth of two initiatives related to geopolitical tensions (America’s Frontier Fund) and to subsidies (American Semiconductor Innovation Coalition).
