Africa is emerging as a significant player in the global semiconductor landscape, as evidenced by the recent partnership between the United States and Kenya. This collaboration highlights the US strategy to reduce its dependence on Asian supply chains by fostering semiconductor development across the African continent.
In May, the US Trade and Development Agency signed a grant agreement with Kenyan technology company Semiconductor Technologies Limited (STL) to conduct a feasibility study for establishing a new semiconductor fabrication facility. This facility aims to diversify and strengthen global supply chains for legacy chips used in various commercial applications. The grant was formalized at the US Chamber of Commerce during Kenyan President William S. Ruto's State Visit to the United States.
According to the World Economic Forum and The New York Times, the US is actively seeking to diversify its supply chains. Kenya, with its abundant mineral resources and growing tech-savvy population, has been identified as a key partner in this endeavor. The US government's support for Kenya's semiconductor industry is part of a broader strategy to reduce reliance on Asia, particularly China, for critical components.
Africa's advantages in semiconductor manufacturing
Africa offers several advantages for semiconductor manufacturing. The continent is rich in critical minerals essential for semiconductor production, including cobalt, tantalum, and copper. Many African nations are investing in education and training to cultivate a skilled workforce for the industry. Furthermore, several countries are creating a favorable investment climate by implementing policies to attract foreign investment and foster a business-friendly environment.
Countries like Kenya, Nigeria, Rwanda, and Ghana provide fertile ground for investment, innovation, and growth in the semiconductor industry. As demonstrated by significant investments from the US, South Korea, China, and the EU in their respective semiconductor markets, these African nations could become crucial nodes in the global network, emphasizing the need for flexibility and adaptability.
While Africa may not be able to produce high-end chips in the foreseeable future, it can contribute to the supply chain through activities such as testing, quality control, and programming. Additionally, African expatriates are investing in related businesses. For example, Ola Fadiran and Mohamed Kassem, with backgrounds in chip design, have founded eFabless, a company that simplifies chip design processes.
As Africa continues to develop its semiconductor capabilities, it is poised to play an increasingly important role in the global semiconductor industry, potentially reshaping supply chains and fostering technological innovation across the continent.
