The effects of the Kovid-19 outbreak and the disruption in the supply chain after Russia’s invasion of Ukraine caused companies to turn to domestic production.
For this reason, many companies are planning to introduce a new policy that will turn their global supply chains upside down as they try to procure products such as chips and textiles, turning away from manufacturing powerhouses such as China. In this context, governments and global-scale companies have tended to “move their production to the center” for critically important products. Some companies are even interested in manufacturing domestically due to the negative impact of artificial intelligence on businesses.
According to the survey conducted by UBS, it was revealed that many senior executives in different sectors are planning to move parts of the supply chain to regions close to their countries. The survey indicated that this trend is 78 percent in Europe, 70 percent in the USA and 54 percent in China.
In a study conducted by Bank of America, it came to the fore that the tendency of companies to “move production into the country” operations increased by 128 percent in the first quarter of the year compared to the same period of the previous year. According to the analysis of the brokerage house Strategas Securities, it was stated that there was a “significant increase” in the transfer of production operations of companies to nearby countries.
Incentives for domestic production from developed countries were introduced
On the other hand, developed countries started to take steps to keep their investments within the borders of their own countries by introducing some incentives. An example of this is the incentives given by the USA for the domestic production of chips and electric vehicle components. The 46 billion dollar package announced by the European Union member states to “increase chip production” was one of these incentives.
According to the Reshoring Initiative, U.S. companies are poised to hire a record number of jobs in the manufacturing industry, with nearly 360,000 job postings in 2022, up 53 percent year on year. Similarly, manufacturers of electrical products are among the companies that post the most jobs, followed by manufacturers of computer products, including chips.
“The USA is trying to maintain its global leadership in chip production”
Ali Baran, CEO of Yongatek Microelectronics, made evaluations on the subject.
Stating that the production and supply crisis came to the fore especially in the chip industry with the pandemic, Baran drew attention to the Taiwan crisis between the USA and China, and pointed out that the USA has taken some steps to produce chips in response to the risk of a chip crisis that will arise with a possible geopolitical crisis and that the global He said he was trying to maintain his leadership.
Stating that Turkey has both a geopolitical and population advantage at this point, Baran said that it can become a new alternative country through cooperation with chip manufacturers operating on a global scale. Baran also emphasized that with certain incentives and agreements, Turkey can become a chip manufacturing center similar to the Malaysian model. Stating that Turkey has the potential to produce technology in chip production in the long term, Baran said that ensuring competitive and global integration is among the most important topics in order to be permanent in the chip industry.