The EU plans to subsidize the semiconductor industry with 43 billion euros by 2030, the US with 52 billion dollars, while China intends to invest 150 billion dollars into research and development. Despite political announcements about Serbia hosting at least two large-scale chip manufacturing factories, no such factories or chip production currently exist in the country. Serbia faces a strategic crossroads, unsure whether to focus on manufacturing or chip design.
The global semiconductor market was valued at approximately 610 billion dollars in 2024 and is expected to grow to around 2 trillion dollars by 2032. Companies like Nvidia generated 80 billion dollars in revenue last year, roughly equal to Serbia’s GDP. While many countries offer tax incentives to attract semiconductor businesses, Serbia has yet to establish production facilities, though it has significant engineering talent.
Serbia has a history of involvement in computer and electronics development, including work on early digital computers and RISC processors in the 1960s through the 1980s. Despite setbacks in the 1990s, Serbian engineers remain skilled in integrated circuit design. Many Serbian engineers are employed by leading global chip companies, and several multinational firms have opened offices in Serbia, signaling confidence in the local talent pool.
Experts argue that Serbia has the conditions to be part of the integrated circuit design ecosystem but emphasize the need for stronger cooperation between universities and industry, increased research and development support, and domestic investment.
The design of semiconductor chips is already underway in Serbia, with notable successes despite limited state support. Expanding this sector requires a committed and long-term government strategy, including financial incentives and support for academia-industry collaboration. Serbia’s lower labor and infrastructure costs compared to developed countries provide a competitive advantage in chip design.
While political debates continue about prioritizing chip manufacturing factories, which require massive investments, skilled labor, and infrastructure, many experts believe Serbia should focus on chip design, which demands less capital but high expertise. With strategic policies and support, Serbia could attract hundreds of millions in foreign direct investment, particularly from companies in artificial intelligence and the Internet of Things sectors.
Key to success is consistent state commitment, targeted funding for research institutions, provision of necessary design tools, and fostering entrepreneurship in chip design. Without sustained government support, Serbia risks remaining on the periphery of the global semiconductor industry, despite its talent and potential.
Examples of small countries like Taiwan and Israel show that disproportionate success in chip design is possible without being a large economy. Serbia’s future in semiconductors depends on harnessing its engineering talent and building a supportive ecosystem for design and innovation.
