Panama’s government said it can help the US diversify and secure its semiconductor supply chain as geopolitical tensions increase the risk of global chip shortages.
(Bloomberg) — Panama’s government said it can help the US diversify and secure its semiconductor supply chain as geopolitical tensions increase the risk of global chip shortages.
Panama’s inclusion as a partner under the US Chips Act will allow chip-makers to nearshore packaging and distribution in Panama, a regional logistics hub, and protect supply chains from disruptions in Asia, Panama’s Minister of Trade and Industry Federico Alfaro Boyd said.
“Panama is one of the most connected countries in Latin America and we have huge experience when it comes to supply chains because of the Panama canal and the ports,” Boyd said in a telephone interview from Panama.
The U.S. announced last week it would partner with Panama to boost global semiconductor supplies and potentially provide the country with money under the U.S. Chips Act. Boyd said that under partnership, Panama will seek to have semiconductors manufactured in the US sent in bulk to Panama, to then be repackaged and shipped to their final destination.
Read more: US to Partner With Panama to Boost Semiconductor Supply
“The US understands that they have to quickly ramp up when it comes to the manufacturing semiconductors, but they are also aware that they cannot do everything themselves,” Boyd said. “The whole supply chain has to be somewhat distributed with friendly countries that are in the region.”
Panama does not currently manufacture semiconductors, but Boyd said the government is exploring fiscal and labor incentives to attract firms in the industry to Panama.
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