2024 highlights Latvia’s rapid development of tech and start-up ecosystems as one of the hottest properties in the Baltic states. Additionally, earlier this month, the country climbed to an all-time high of second place (behind Estonia) in Emerging Europe’s IT Competitiveness Index, part of the Future of IT 2024 report. What are the news for microchips and semiconductors sector?
This week, there was further confirmation of the country’s upward trajectory and of its ongoing efforts to become the preeminent Baltic investment destination. In the latest edition of Emerging Europe’s Investment Promotion report, LIAA, third in 2023 behind Estonia and Lithuania, leapfrogged both of its neighbours to claim top spot. Latvia outperformed its competitors in two of the five categories that contribute to an IPA’s overall score: “Validity of information” and “Support and community building”.
According to the IMF, FDI in Latvia reached 1.5 bn euros in 2023, a big increase on the 1.16 bn of 2022, with almost 90% coming from EU. Sweden is the largest single investor, accounting for nearly a third of all inward investment. Key sectors include professional and technical services, finance and insurance, real estate, and manufacturing.
In this scenario, the country has the opportunity to be integrated into global microchip manufacturing chains. The Ministry of Economics is ready to provide all available support to make this happen.
A delegation from the international microelectronics association SEMI Europe was visiting Latvia to get to know the achievements of local scientists and companies in microchip technology development and to discuss closer cooperation to enhance the competitiveness of Latvia and EU in global semiconductor value chains.
It has been acknowledged that Latvia has significant comparative advantages to become a key part of the microchip manufacturing chains, particularly in the areas of higher education, research, and technical competencies. The industry has a bright future: it is a gateway to production chains valued at €2.8 trillion. A significant increase in demand is expected in the coming years due to the development of generative AI, which will also require very large data centres and server capacities.
The EU Chip Act states that each member state has the opportunity to apply for the establishment of a semiconductor competence centre, thereby promoting the EU’s sovereignty and self-sufficiency. The design and testing stage of the microchip value chain currently accounts for the largest part of turnover, and Latvia has advantages in terms of competent workforce and technologies.