Turkey nurturing a plan of turning into bold supplier of chips for domestic & foreign industries

By Ali Kursat Buyukada

Turkiye is making all efforts to commence chip production, one of the critical electronic components in numerous sectors, such as automotive, defense, health, communications, etc. Turkiye will turn into a production base, especially for Europe and nearby geographies. In addition, problems in the supply of chips for Togg, Kizilelma, ANKA, and domestic IHAs will be prevented.

The chip crisis, which is used at every point of technological vehicles, and especially negatively affecting the automotive industry during the pandemic, has prevented the production of millions of new devices worldwide since 2020. In this context, Turkiye will establish chip production facilities to avoid failure to provide domestic projects with chips.

Turkiye will turn into a production base, especially for Europe and nearby geographies, primarily for its own production needs at the point of chip production. With the start of the production of domestic chips, it is foreseen that there will be no potential problems in the supply of chips for technological defense products, such as Togg, Kizilelma, ANKA, and domestic UAVs.

Industry and Technology Minister Mustafa Varank in a statement said that the world has recently been struggling for setting up new chip production facilities.

“Due to its strategic importance, there is a trend towards decentralization of existing unipolar generation capacity. In this process, we can become a chip production base, especially for Europe, taking into account our own needs. For this, we are working on a chip production facility investment in Turkiye,” he said.

With the impact of the chip crisis, the supply-demand balance deteriorated and the world increased its chip production during the crisis. World brands that want to end the chip crisis, whose negative impact is expected to continue until 2025, have made plans for new factories in both the USA and the Far East. In this context, compared to countries with long shipping times, Turkiye will be one step ahead in providing chips to manufacturers in Europe due to time savings.

Taiwan is the leader in the chip industry, which has a major role in the production of technological products. The shortage in chip supply during the pandemic in 2020 and beyond has pushed all countries to invest in this sector. Turkiye stands out as one of those countries. Thus, it is aimed to spread chip production from a single center to various points and to provide a solution to supply security. For example, the USA wants to establish 11 different chip production facilities in the long term and targets a huge investment of 200 billion dollars in total.

While Turkiye aims to be a global actor in chip production, manufacturing points are also of interest. According to the information, a large area was allocated to Ankara for chip production. Meanwhile, a vehicle has an average of 1,200 chips, and even other simple technological devices have an average of 40 chips. In electric vehicles, like Togg, the number of chips needed exceeds 2,000. It is stated that even as we enter the year 2023, due to the chip crisis, some automobile manufacturers are experiencing difficulties.