Officials underscore Brazil's chip-making ambitions

Backed by $250 million in funding
Ceitec is a startup backed by about $250 million in government funding. The company's wafer fab here is considered modest by modern semiconductor manufacturing standards. It will eventually be capable of processing about 50,000 wafers per year and can support manufacturing down to the 0.35 micron node, according to Fabio Pintchovski, Ceitec's vice president of R&D. The fab won't be officially in production until late this year.

In an interview prior to the grand opening event, Sergio Rezende, Brazil's minister of science and technology, described Ceitec as part of a multi-step plan to establish a semiconductor industry in Brazil. In the early part of the decade, Brazil started a national program to develop a microelectronics industry and began providing incentives for universities and students aimed at developing more design engineers, he said. The next step was to begin government funding of the Ceitec program (the precursor to the incorporation of Ceitec SA), he said. The final step will be the creation of incentives, including tax breaks, designed to lure multi-national chip companies to Brazil, Rezende said.

Rezende, a long time engineering professor at several universities in the U.S. and elsewhere, said that the Brazilian parliament has already passed laws that give the president the authority to create financial incentive programs to attract multi-nationals. "This is in the plan," Rezende said. "But we have to take one step after the other."

A number of contract manufacturers based in South Korea and elsewhere have facilities in a free trade zone established by Brazil in the city of Manaus. Almost all of the components they use are currently imported, Rezende said, but the Brazilian government has the authority to impose conditions requiring that a certain percentage of components they buy must be made in Brazil.

Asked if Brazil could potentially become a global semiconductor manufacturing hub, Rezende responded "Absolutely." He said that the country has made graduating more engineers a priority. While he drew important distinctions between Brazil and China—chiefly the size of the countries' respective populations—he said Brazil can graduate a proportionally comparable number of engineers. Brazil's population is about 190 million, China's is over 1.3 billion.