Brazil's Strategic Moves to Address Semiconductor Crisis and Boost Domestic Chip Production
Brazil negotiates with China to resolve a semiconductor shortage threatening its automotive sector while partnering with Malaysia to develop domestic chip production.
- • Brazil negotiates with China amid a semiconductor export suspension affecting automotive manufacturing.
- • President Geraldo Alckmin engages diplomatic channels to maintain chip supplies, warning of manufacturing disruptions in weeks.
- • Brazil and Malaysia form a joint venture targeting microchips for electric vehicles and energy transition equipment.
- • Brazil reactivates its only domestic chip factory and leverages major rare earth reserves for semiconductor development.
Key details
Brazil is actively tackling the semiconductor supply crisis and advancing its chip production capabilities through significant international collaborations. The government is in negotiations with China to mitigate the global chip shortage impacting Brazil's automotive industry, which employs 130,000 people directly and 1.3 million indirectly. This crisis arose after Dutch government intervention in Nexperia, a Chinese company controlling 40% of the global automotive chip market, prompted China to suspend chip exports. President Geraldo Alckmin has engaged with the Chinese ambassador and utilized diplomatic channels like the Sino-Brazilian High-Level Concertation and Cooperation Commission (Cosban) to seek resolutions, emphasizing the urgency as current supplies could sustain only two more weeks of production.
Simultaneously, Brazil is deepening ties with Malaysia through a joint venture focusing on semiconductor manufacturing for electric vehicles and energy transition technologies. This partnership coincides with President Luiz Inácio Lula da Silva's visit to Malaysia and the signing of five science and technology cooperation agreements. Brazil is also revitalizing its solitary domestic chip factory and capitalizing on its substantial rare earth element reserves, ranking second globally, to strengthen its position in the semiconductor industry.
These efforts reflect Brazil’s dual approach: diplomatically securing essential chip imports while cultivating a more autonomous and resilient semiconductor sector to support critical industries and economic stability.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
