The US is partnering with the government of Panama in a bid to boost and diversify its supply of semiconductors as geopolitical tensions increase the risk of global chip shortages.

The US will review Panama’s current semiconductor industry, regulations and workforce to determine potential future collaboration under the Chips Act, the State Department said in a statement on Thursday.

“The United States views Panama as a partner in ensuring the semiconductor supply chain is diverse and resilient,” the statement read.

The Chips Act, approved last year with bipartisan support, is meant to revive US chipmaking manufacturing, which has declined to about 12% of global production from 37% in 1990. The law provides the State Department with $500 million over five years to expand production and secure supply chains, according to the statement.

The announcement comes after Panama’s Trade Minister Federico Boyd met in May and July with US Trade Secretary Gina Raimondo, as well as the U.S. semiconductor industry association to lobby for Panama becoming a regional hub for semiconductor assembly.

Panama exported $1.1 million in semiconductors in 2021, largely to neighboring countries such as Honduras and Costa Rica, according to International Trade Centre, a multilateral agency. The State Department said last week it would explore similar opportunities under the Chips Act with Costa Rica, where Intel manufactures and tests semiconductors.

By: DocMemory
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