The global semiconductor industry is undergoing rapid transformation, driven by rising demand, geopolitical shifts and the need for more diversified and resilient supply chains. The US, EU and Japan are all actively seeking to diversify their semiconductor supply chains and semiconductor manufacturing is now at an inflection point as a result.

Traditionally concentrated in East Asia and North America, new regions now have the potential to play a pivotal role in the industry’s future. With the right policies and investments, Africa could position itself as a key partner in these diversification efforts.

Africa’s potential is driven by several key factors. The continent is rich in the critical minerals essential for semiconductor production, including cobalt, tantalum and rare earth elements. At present, these minerals are extracted in Africa and then typically refined and processed abroad. Developing local semiconductor facilities would enable African nations to capture more value from their natural resources and drive industrial growth.

Africa also boasts a young, expanding workforce with a growing number of STEM graduates. Countries including South Africa, Nigeria, Egypt and Kenya are investing in technical education and innovation hubs, creating a talent pipeline for the semiconductor industry. With the right investments in training and infrastructure, Africa can emerge as a competitive player in advanced manufacturing.

Finally, Africa’s strategic location enhances its appeal for global trade. Recent supply chain disruptions caused by geopolitical tensions and natural disasters have underscored the need for diversification of the semiconductor industry. Positioned between major markets in Europe, the Middle East and Asia, Africa offers a viable location for semiconductor manufacturing, reducing global supply chain vulnerabilities.

Africa’s growing capabilities in semiconductor manufacturing, as well as assembly, testing and packaging (ATP) present a strategic opportunity to enhance supply chain diversification and support global technological progress.

Semiconductor fabrication (front-end manufacturing) is highly capital-intensive, requiring advanced infrastructure and expertise. But ATP – which encompasses the final stages of semiconductor production including chip assembly, packaging and testing before distribution to end users – presents a more accessible entry point into the semiconductor supply chain for Africa.

Four main factors make ATP a compelling opportunity for Africa:

Other parts of the semiconductor manufacturing process, such as wafer fabrication, demand billions in investment and ultra-clean environments. ATP facilities are significantly more affordable to establish and operate. African nations could use ATP as a stepping-stone to gradually develop semiconductor design and fabrication capabilities in the future.

ATP processes rely on a skilled yet cost-effective workforce, making Africa’s large labour pool a strategic asset. Countries like Malaysia and the Philippines have upskilled their workforces to successfully leverage ATP as an entry point into the semiconductor industry, providing a model for African nations to follow.

Many materials used in semiconductor packaging, including substrates, copper and silicon wafers, could be sourced locally in Africa – with the right investments in refining and processing infrastructure.

As semiconductor firms seek alternative manufacturing locations to reduce reliance on a few concentrated regions, Africa has an opportunity to attract investment. Strategic partnerships between African governments and multinational semiconductor companies could accelerate ATP facility development and integration into global supply chains.

Unlocking Africa’s potential for semiconductor manufacturing and ATP will require key policy and investment initiatives from African governments.

Semiconductor ATP facilities require reliable energy, water and logistics infrastructure. African governments should prioritize building industrial parks with stable electricity grids, clean water access and efficient transportation networks. Public-private partnerships can play a crucial role in financing these projects.

Creating a skilled workforce to match Africa’s semiconductor ambitions will mean expanding engineering and technical training programmes. This could happen in collaboration with global semiconductor firms and universities to build industry expertise. Vocational training in semiconductor packaging, testing and quality control will further strengthen the talent pipeline.

African governments should use tax incentives, low-interest loans and special economic zones to attract multinational semiconductor firms. Clear and stable regulatory frameworks will further enhance investor confidence in Africa’s semiconductor industry, attracting long-term commitments.

Given the capital-intensive nature of semiconductor manufacturing, regional cooperation among African nations could enhance the continent’s competitiveness. Establishing semiconductor clusters across multiple countries would create a unified ecosystem. The African Continental Free Trade Area (AfCFTA) provides a strong foundation for facilitating trade and investment in this sector.

Collaboration with established semiconductor players will also accelerate Africa’s industry development. Governments should negotiate technology-sharing agreements, joint ventures and research partnerships with US, European and Asian firms to foster innovation and knowledge transfer.

Africa’s integration into global semiconductor supply chains could have far-reaching benefits. It would enhance supply chain resilience, reduce the overreliance on East Asia’s semiconductor industry and support long-term industry sustainability. More generally, as Africa industrializes, its role in advanced manufacturing will drive economic growth, create jobs and foster even more technological innovation.

Expanding semiconductor manufacturing and ATP into Africa presents a transformative opportunity for both the continent and the global technology industry. By leveraging its mineral wealth, youthful workforce and strategic location, Africa can become a vital player in semiconductor supply chains. Targeted investments in infrastructure, workforce training and policy incentives will enable African nations to build a competitive semiconductor ecosystem, driving its industrialization and economic progress.

As the semiconductor industry evolves, Africa’s participation in this critical sector could help to shape the future of global technology manufacturing.

https://www.weforum.org/stories/2025/03/how-africa-could-help-to-diversify-the-booming-global-semiconductor-industry/