How African nations can become semiconductor supply hubs

The microchips that power artificial intelligence's (AI's) large language models (LLMs) are currently dominating headlines around the world. But chips – and the semiconductor material they're made out of – underpin our everyday lives in so many other ways. They power smartphones, medical devices, electric vehicles, industrial machinery, energy grids, telecom networks, payment systems and agricultural equipment.

As more capital, talent and capacity flows towards satisfying AI compute needs, these other sectors that are also essential to economic development could face supply constraints, higher costs or slower innovation. But if African nations create a place for themselves in the global semiconductor industry, this could help diversify the semiconductor supply chain, boosting the booming chip industry.

Rather than only viewing semiconductors through advanced AI chip demand, the continent should position itself in the broader semiconductor economy. African nations could then help to power health systems, clean energy and transport and manufacturing. They would also be helping to boost digital inclusion and industrial development.

To capture this opportunity, African nations need a coordinated strategy that identifies realistic entry points in the semiconductor value chain, builds the required capabilities and connects them to growing global demand.

The rise of AI has changed the economics of the semiconductor industry. Advanced chips used for training and running AI LLM models command enormous value. Data centres require specialized processors, memory, cooling systems, networking equipment and reliable energy to handle significant AI compute needs. This has created a powerful investment cycle around AI infrastructure.

But this boom also brings new vulnerabilities. If too much investment and capacity shift toward AI compute, other semiconductor-dependent sectors could struggle to secure the chips, components and electronics they need.

AI chips have generated roughly half of global semiconductor revenue in 2026, while representing less than 0.2% of total chip volume, according to Deloitte’s 2026 Global Semiconductor Industry Outlook. But other types of chips are essential to the functioning of modern economies.

Cars cannot operate without chips. Hospitals cannot modernize without diagnostic devices and medical electronics. Energy grids cannot become smarter without sensors, inverters and power-management systems. Factories cannot improve productivity without industrial control systems and automation technologies. And farmers cannot adopt precision agriculture without connected equipment and embedded electronics.

Semiconductor supply dynamics, therefore, should support the development of a more balanced and resilient chip manufacturing and supply ecosystem.

Africa’s opportunity lies across the broader semiconductor ecosystem, including electronics assembly, testing, packaging (ATP), minerals processing, components manufacturing and chip design. These are realistic entry points that do not necessarily require multibillion-dollar chip fabrication plants. They do, however, need targeted investments in engineering talent, industrial infrastructure, reliable energy and partnerships with global firms.

Several African economies already demonstrate potential in different parts of this ecosystem. Kenya is home to Semiconductor Technologies Limited and has attracted US support for a feasibility study for a semiconductor fabrication facility. Morocco has built a substantial automotive manufacturing base. South Africa has an established industrial research base through institutions such as the Council for Scientific and Industrial Research (CSIR). Egypt is developing semiconductor design, electronics and embedded-systems capabilities. And Nigeria offers market scale through its population of more than 237 million people and its large ICT and digital economy.

Rather than pursuing identical strategies, African countries could specialize and then build regional partnerships. A regional approach would allow Africa to integrate into global semiconductor value chains rather than replicating existing hubs.

This would align with KPMG's Global Semiconductor Industry Outlook for 2026, which shows that making semiconductor supply chains more flexible and adaptable to geopolitical disruption has become the industry’s top strategic priority. Greater geographical diversity is the leading action companies plan to take to do this.

With this approach, Africa could play a significant role in global supply-chain resilience. As companies and governments around the world look beyond a small number of semiconductor production hubs, Africa could offer new partnerships, markets, talent pools and industrial corridors.

The African diaspora could play an important role in this plan. African professionals work in the chip sector or in adjacent industries across North America, Europe, Asia and the Middle East.

These experts could accelerate progress by offering African nations assistance in areas such as training and finding investment opportunities, as well as setting standards and regulations, and fostering business collaborations. Governments may also require help identifying which segments of the semiconductor value chain are practical for them to enter, as well as economically feasible and consistent with their national development objectives.

Ola Fadiran, an LA-based Nigerian American entrepreneur, is already contributing to Africa’s semiconductor ecosystem through his company ChipMango. It works with universities and governments to train engineers, develop curricula and build national talent pipelines.

Semiconductor industry development requires capital, but it also requires know-how, networks and trust. Africa's diaspora professionals can help bridge the gap between the global industry's needs and the continent's opportunities.

Africa’s semiconductor strategy should start with readiness – identifying comparative advantages, building capabilities and strengthening regional cooperation. Priorities should include developing technical education programmes and ensuring nations can offer reliable energy sources. Establishing electronics manufacturing and partnerships with firms seeking diversified supply chains would also be a sensible starting point.

The focus should not be only on fabrication plants. Near-term opportunities for Africa span electronics, design, testing, packaging, components manufacturing and industrial applications.

The AI boom is real, but the larger opportunity lies in helping to build out a global semiconductor supply ecosystem to make chips for AI – and for other needs. In a world shaped by compute power, we need to build and diversify the systems that power everyday life. With the right strategic plan, African nations can play a role in this by becoming semiconductor supply hubs.