Minister advocates for special export zone for semiconductors

The Minister of Foreign Affairs, Carlos França, defended on Wednesday, April 27, creating a special export zone to entice semiconductor makers into Brazil given that the product is in short supply on the global market.

Export processing zones (ZPE), tax-free zones with foreign exchange autonomy, and streamlined administrative requirements would be the cornerstones of such a policy. The concept is being debated in the government, according to França, and the Minister of Economy, Paulo Guedes, is enthused about it.

“I believe that creating such an environment in Brazil will not only boost the country’s existing industry but would also attract new investors to the domestic market at a time when global leaders are looking to diversify and decentralize their operations,” said França.

The minister argued in favor of creating a special export zone during an international semiconductor chain seminar held at the Ministry’s headquarters. The problem draws the government’s attention as it affects all industry sectors and puts pressure on prices in the domestic market.

According to the National Association of Automotive Vehicle Manufacturers (Anfavea), the problem has affected national automobile manufacturing more intensely, with recurrent cutbacks owing to a scarcity of semiconductors. Prices in the car industry have dramatically risen as supply has fallen short of demand. The organization has been lobbying for measures to promote the national production of the component.

Brazil now produces just 10% of the country’s chip and semiconductor demand. According to the Brazilian Association of the Semiconductor Industry (Abisemi), 20 companies are operating in the sector in the country, whose revenue in 2021 was R$ 4.5 billion.

Last year, Congress authorized an extension of the credit incentives given under the Program to Support Technological Development of the Semiconductor Industry (Padis) through 2026 to boost output.

“This is a State policy,” said the Minister of Science, Technology, and Innovation, Paulo Alvim, also present at the seminar. He recalled that the demand shock caused by the covid-19 pandemic made many countries adopt incentives for national production. “We have to face [the shortage of semiconductors] not only as a threat but as a window of opportunity that opens up for our country,” he warned.

Source: Agência Brasil

To read the full original article, please go to:

https://agenciabrasil.ebc.com.br/economia/noticia/2022-04/chanceler-defende-zona-de-exportacao-especial-para-semicondutores

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