The global semiconductor sector plays a critical role in modern high-tech economies, where government support often serves as a catalyst for sustainable growth and competitiveness.
The experiences of countries like the USA, China, South Korea, and Taiwan demonstrate that a comprehensive industrial policy in the semiconductor sector can transform a nation’s economic future.
Analyzing their approaches provides Kazakhstan with key strategies to strengthen its economy and support high-tech sectors.
Strategic Approaches in Semiconductor Production: USA and China
In an era of intense global competition, the USA and China have launched large-scale government support programs. In the USA, the CHIPS Act is aimed at strengthening domestic semiconductor production, supporting research, and ensuring national security. Such initiatives are designed to maintain America’s leadership in technology and minimize dependence on imports, which is especially important amid international trade conflicts.
China, on the other hand, has been investing in the semiconductor sector for decades. The National Integrated Circuit Fund (“Big Fund”), established in 2014, allocated tens of billions of dollars for production, research, and innovation development. The Chinese government supports the sector not only through direct subsidies but also with tax incentives, research grants, and the creation of regional clusters. The country also focuses on localizing production and increasing domestic capacity to reduce dependence on foreign technology.
For Kazakhstan, this experience underscores the importance of comprehensive funding and government support.
The creation of a fund similar to China’s could help concentrate resources on developing strategic high-tech industries. Furthermore, to transition successfully to a production-based economy, Kazakhstan should attract foreign investment by leveraging international partnerships for the transfer of advanced technologies.
Strategic Priorities and the Role of Government Institutions: South Korea and Taiwan
South Korea and Taiwan are classic examples of how governments can support economic development in industrial sectors. In the 1980s, South Korea identified the semiconductor sector as a priority and established the Korean Electronics and Telecommunications Research Institute (ETRI), which played a key role in integrating research and development with manufacturing processes. The state actively promoted private companies, such as Samsung and SK Hynix, and invested in building large production capacities, allowing the country to become a global leader in chip production.
Taiwan, on the other hand, developed a fabless model by outsourcing production and building a network of independent factories and companies. Government support included the creation of the Nankang Technology Park and other special economic zones, which helped TSMC become a global leader in contract chip production. Taiwan actively developed partnerships with foreign companies, which facilitated technological progress and strengthened the local economy.
For Kazakhstan, the experiences of South Korea and Taiwan highlight the importance of creating specialized industrial parks and technology parks aimed at developing specific high-tech industries.
Integrating the private sector into these clusters, as demonstrated by South Korea’s experience, enables large-scale transformations across the entire economy. Government research institutes can play a coordinating role, supporting local companies in their technological advancement.
Human Capital Development and Knowledge Exchange
Each of these countries has paid great attention to human capital development. Educational programs, professional training initiatives, and partnerships with leading universities have helped build a highly skilled workforce to drive innovation. For example, the USA and South Korea focused on developing research programs closely integrated with universities and private companies, fostering critical skills in fields such as electronic engineering and materials science.
China actively attracts foreign specialists and creates conditions for overseas training. Taiwan, for its part, created research institutes like the Electronics Research and Service Organization, turning them into powerful centers for technology and knowledge transfer.
For Kazakhstan, developing programs for training and retraining personnel is an essential component of successful economic transition.
Joint programs with foreign universities and research centers, as well as supporting young professionals through internships and exchange programs, can help raise the quality of local human capital. In the long run, this will contribute to the growth and development of key sectors, including high-tech industries.
Supporting Production Through Demand Stimulation and Market Creation
In the face of global competition, governments also create demand for products through public procurement and stimulate consumer interest. In the USA, a significant portion of the semiconductor market is driven by the defense sector, which helps support demand for domestic developments. South Korea also stimulated domestic demand by supporting national producers through various subsidy and tax incentive programs.
For Kazakhstan, stimulating domestic demand can be achieved through public procurement programs and by introducing high-tech solutions in both the public and private sectors.
Developing national standards and using local technologies in government infrastructure will not only support the economy but also create a substantial market for local companies.
The global experience in the semiconductor sector confirms that the successful development of high-tech industries requires active government involvement and long-term strategic investments. Kazakhstan can learn a great deal from the USA, China, South Korea, and Taiwan, including the importance of establishing specialized support funds, developing infrastructure through industrial zones, and attracting foreign capital. Moreover, professional training programs and academic partnerships can help supply the economy with highly qualified personnel.
The gradual implementation of these approaches will enable Kazakhstan to accelerate the development of its own high-tech industries, create new jobs, and establish a sustainable foundation for economic growth and enhanced competitiveness on the global stage.
By Timur Useyev, an Economist
