„Chip supply disruption has caused a production decline in many industry sectors, and has contributed to the slow-down of economic growth worldwide. The EU is now trying to reduce its dependence on supplies from other countries through the European Chip Act. It creates a framework for investment in chip manufacturing which the Czech Republic can also benefit from,“ says Dušan Drábek, Associate Director Industrial Agency at Savills, and further explains, „Chip manufacturing is a highly complex process involving not only the production itself, but also associated developments. It is very demanding in terms of investment and skilled labour. Therefore, new investment in chip production, whether in the US or in the EU, is usually made with significant contributions from national governments. The Czech Republic now has a unique opportunity in this respect, consisting in a possible expansion of chip production in Rožnov pod Radhoštěm, which in the future might not remain only at this location.“
Looking at the geographical breakdown, Savills has seen significant changes over the past 30 years in regard to semiconductor production. For example, China has grown to be the largest market by global revenue accounting for 24% in 2015, before increasing its share to 32% in 2022. In contrast to Asia’s expansion, the US has seen its share of global production fall from 37% in 1990 to 12% in 2021. Savills anticipates that this trend is likely to reverse, with Europe also now looking to attract their own manufacturing base and supply chain.
Andrew Blennerhassett, associate in the industrial & logistics research team at Savills, comments: “We expect semiconductor demand to continue to grow sharply over the next decade, amid megatrends including AI, electric vehicles, cloud computing and automation.”
