Panama: Semiconductor Supply Chain Opportunities
Former President Laurentino Cortizo launches country strategy for the development and promotion of microelectronics and semiconductor activities.
During Commerce Secretary Gina Raimondo’s visit to Panama on July 20, 2023, the United States announced a partnership to explore opportunities to grow and diversify the global semiconductor ecosystem under the International Technology Security and Innovation Fund (“ITSI” Fund), created by the CHIPS Act of 2022. The U.S. selected Panama as one of the countries with which it will collaborate to strengthen the global value chain of semiconductors under the ITSI Fund. The partnership includes funding for an OECD study that will review Panama’s current semiconductor ecosystem, regulatory framework and workforce needs. This study is expected to be published in Fall 2024. In March 2024, the Semiconductor Industry Association (SIA) visited Panama as part of an exploratory mission to assess the country’s capabilities for investments from this critical industry.
Former Panamanian President Cortizo launched Panama’s country semiconductor strategy on April 30, 2024 and signed a decree that established guidelines to integrate Panama into the worldwide semiconductor and microelectronics supply chain. To accomplish this, new Panamanian talent in these fields must be trained for specific skills. Also, additional funding for research and development linked to semiconductor manufacturing will be required.
The executive decree also created a Commission for Innovation in Microelectronics and Semiconductors under the Ministry of Commerce and Industries to foster cross-sectoral and interinstitutional collaboration and oversee the execution of national policy. This commission will be led by Panama’s National Secretary of Science, Dr. Eduardo Ortega-Barria. The commission established a new scholarship program for master’s and doctoral degrees specialized in microelectronics and semiconductors. To achieve this, Panama signed two separate collaboration agreements with Arizona State University and Purdue University.
The Panamanian government wants to target two areas of opportunity: circuit board construction and assembly, test, and packaging of semiconductors. There remain obstacles to overcome as they attempt to attract investment. While it is a shipping and logistics hub, Panama does not have an existing microelectronics manufacturing ecosystem and there are major workforce development gaps. The semiconductor industry has urged Panama to sign the World Trade Organization’s Information Technology Agreement 2 (WTO ITA 2) which removes all tariffs and duties on technology equipment and products to make Panama more competitive for investment. American businesses may be unlikely to choose Panama as a destination for investment without this agreement in place.
If you are interested in the Information and Technology sector in Panama, contact your local U.S. Export Assistance Center office or Kenneth Delvalle, Commercial Assistant in Panama by email at Kenneth.Delvalle@trade.gov