December 2024 Updates for Design Engineers 

Read the latest semiconductor and electronics news and updates. 

In this edition:

1. 2024, That's Wrap! 

2. Polymatech Electronics’ $100M Facility in Bahrain.

3. Gotion High-Tech’s Battery Plant Expansion.

2024 That's a Wrap!

This year was pivotal for the semiconductor industry, shaped by geopolitical tensions, groundbreaking investments and technological advancements. Giants like TSMC, Samsung and Intel faced fluctuating market demands, regulatory challenges and project delays, underscoring the industry's complexities in an interconnected world.

One standout event was TSMC halting shipments to Sophgo after discovering links to Huawei, raising concerns about compliance with U.S. export controls. This incident highlighted the growing impact of U.S.-China trade tensions, prompting companies to navigate heightened scrutiny and conflicting regulations.

China made bold moves to achieve semiconductor self-sufficiency, launching a $47.5 billion state-backed fund under its "Big Fund" initiative. This investment focuses on reducing reliance on foreign technology and bolstering domestic chip manufacturing amid tightening U.S. sanctions. Meanwhile, Intel restructured to remain competitive, delaying projects in Poland and Germany while focusing on U.S.-based operations supported by CHIPS Act funding.

Regional developments were equally dynamic. The Middle East emerged as a new semiconductor hub, with countries like Saudi Arabia, the UAE and Türkiye announcing multi-billion-dollar investments. These moves aim to strengthen technological independence and contribute to global supply chains.

In Taiwan, investments in AI data centers reaffirmed its leadership in semiconductor innovation, while North America's semiconductor manufacturing efforts gained momentum with TSMC's Arizona facility exceeding performance expectations. However, these successes unfolded amid ongoing geopolitical and supply chain challenges.

The EV sector also played a significant role, driving demand for advanced chips critical for renewable energy systems, autonomous vehicles and smart devices. Despite challenges, strong AI-related demand offered promising growth opportunities.

This transformative year underscored the industry’s resilience and adaptability. With record investments, strategic shifts and a focus on innovation, 2024 set the stage for even greater advancements. Looking ahead to 2025, the semiconductor sector is poised to continue shaping the future of technology and global economies and we, at McKinsey Electronics are here for it.

Happy New Year from the McKinsey Electronics team. 

Read the full stories in our latest blog. 

Polymatech Electronics' $100M Facility in Bahrain

Polymatech Electronics, a key player in semiconductor technology, has announced a $100 million investment to establish a cutting-edge manufacturing facility in Bahrain. This initiative represents a significant step in the Middle East’s efforts to localize semiconductor production and enhance its global competitiveness.

The new facility is poised to focus on producing advanced semiconductor components, catering to industries like automotive, consumer electronics and renewable energy. Its strategic location in Bahrain offers access to key markets in the GCC region, Europe and Asia, making it a critical hub in the global semiconductor supply chain.

Polymatech’s move aligns with Bahrain's vision to diversify its economy and strengthen its position as a technology leader. With favorable policies, robust infrastructure and proximity to major markets, the country is an ideal location for such investments.

This development also underscores the broader trend of semiconductor localization across the Middle East. As nations like Saudi Arabia and the UAE have been pursuing similar projects, the region is set to become a pivotal player in addressing global semiconductor shortages and meeting the growing demand for advanced chips.

For more news on the region’s advancements in the semiconductor industry, subscribe to our newsletter.

Gotion High-Tech's Battery Plant Expansion

Gotion High-Tech, a major Chinese battery manufacturer, has announced ambitious plans to invest €2.5 billion in constructing two state-of-the-art battery production facilities in Morocco and Slovakia. Each facility is set to have an annual production capacity of 20 GWh, positioning Gotion as a leader in global battery manufacturing and advancing the EV and renewable energy supply chains.

Morocco: Africa’s Emerging Gigafactory Hub 

In Morocco, Gotion is investing €1.28 billion to establish the continent’s first gigafactory. Set to be located in the Rabat region, the facility is scheduled to begin production by 2026, focusing on manufacturing batteries and components like cathodes and anodes, mainly for export to European and African markets. Morocco’s strategic geographic position, free trade agreements with the EU and the U.S. and access to African economies make it a highly attractive location for such an advanced manufacturing project.

The Moroccan government has actively supported this investment, signing agreements with Gotion and partnering with CDG Group, which pledged €300 million for the project’s initial phase. The gigafactory is expected to bolster Morocco’s automotive sector, which is transitioning toward EV production, while also helping sustain approximately 220,000 jobs in the industry.

Slovakia: At the Heart of Europe’s EV Industry

In Slovakia, Gotion is investing €1.234 billion to establish a production facility through a joint venture with InoBat Auto, called Gotion InoBat Batteries (GIB). The plant, located in Šurany, will begin operations in 2026 and cater to Europe’s automotive manufacturing hub. By situating the plant near leading automakers, Gotion aims to meet the region’s growing demand for next-generation EV batteries and renewable energy storage solutions efficiently.

Both facilities will focus on producing advanced batteries critical for electric vehicles, energy storage systems and renewable energy integration. These investments come as part of a broader global shift toward decarbonization, underscoring the rising importance of sustainable technologies and localized production hubs to enhance supply chain resilience.

Gotion’s investment, which complements the region’s technological advancement and sustainable growth, aligns with McKinsey Electronics’ efforts to support Morocco’s innovation ecosystem. By providing advanced semiconductor solutions, we aim to enable the seamless integration of technologies essential for the EV supply chain and beyond.