(Kyiv) – Ukraine has approved a strategy to establish its own chip production, requiring at least $1 billion in investment, as the country seeks to revive its semiconductor industry and integrate into global supply chains.
The Cabinet of Ministers of Ukraine has endorsed the Digital Development Strategy until 2030, which includes plans to develop domestic semiconductor manufacturing. The Ministry of Digital Transformation estimates that at least $1 billion will be necessary to launch chip production, according to government documents and reports from Forbes.
On December 31, the government approved the strategy along with an action plan for 2025-2027. The initiative highlights the importance of semiconductor technology, which is crucial for innovations in artificial intelligence, high-performance computing, mobile devices, and the Internet of Things.
The European Union has committed €43 billion to microchip production, aiming to secure 20% of the global semiconductor market by 2030. This presents an opportunity for Ukraine to integrate into European supply chains and expand its technological sector.
Despite Ukraine’s strong workforce in software and chip design, the country lacks specialized manufacturing facilities. During the Soviet era, Ukraine contributed up to 40% of the USSR’s microelectronics production. However, after the collapse of the Soviet Union, the industry declined, with many experts leaving the field or emigrating.
The main barriers to semiconductor development in Ukraine include limited research funding, brain drain, outdated infrastructure, intense global competition, and integration challenges in international markets. Additionally, the domestic market size remains insufficient to support large-scale production.
Nevertheless, Ukraine has key advantages, including a skilled workforce and historical experience in microelectronics. The continued presence of educational institutions specializing in semiconductor technologies provides a foundation for industry revival.
The strategy outlines several steps to establish chip manufacturing:
- Drafting a law to promote semiconductor industry development, attracting investment, and fostering research.
- Creating an innovation cluster combining research institutes, universities, startups, and private companies.
- Integrating microelectronics with other advanced technology sectors, such as defense technology.
- Signing agreements with the EU and international microelectronics firms for joint projects and investment programs.
- Encouraging investment in semiconductor manufacturing facilities.
The government plans to sign memorandums with the EU and chip manufacturers by the third quarter of 2025, aiming to strengthen cooperation under the European Chips Act. This initiative seeks to establish partnerships, expand market access, and enhance Ukraine’s role in semiconductor production.
The global semiconductor industry is currently dominated by Taiwan’s TSMC and South Korea’s Samsung. To reduce reliance on these manufacturers, China, the U.S., and Europe are heavily investing in their own production capabilities.
Oleksandr Hrudanov, a member of Ukraine’s Ministry of Digital Transformation, stated that the country aims to produce chips with sizes of 180, 130, and 110 nanometers. While these are not the most advanced technologies—compared to Intel’s 1.8 nm and TSMC’s 4 nm chips—they can serve industries such as defense, agriculture, and automotive manufacturing.
The U.S.-based Silvaco Group has been identified as a potential software partner for chip development. There are two primary strategies for launching production. The first involves partnering with a licensed company that would oversee plant construction, equipment setup, and pilot production. The state could retain a controlling stake to prioritize domestic needs, particularly for military and research applications. This approach would also include training Ukrainian specialists abroad.
The alternative approach is to select a private-sector partner through a public tender. Under this model, technology licensing costs would be separate from construction expenses, which are expected to remain within the $1 billion estimate.
Hrudanov emphasized that while Ukraine is considering both models, final decisions will depend on securing investment incentives and legal frameworks similar to the EU’s Chips Act. Stability in the region and security guarantees will also be crucial for attracting potential investors.
Once an agreement is signed with a manufacturing partner, it will take approximately two years to construct and equip the production facility. Full-scale manufacturing is expected to commence by the third year.
Ukraine’s broader WINWIN Digital Development Strategy until 2030 aims to establish the country as a global technology hub. The plan identifies 14 key sectors, including defense technology, medical technology, and space innovation, positioning Ukraine as a leader in high-tech development.
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