Lula creates group to reverse liquidation of state-owned chips and semiconductors

President Luiz Inácio Lula da Silva (PT) intends to reverse the liquidation of the National Center for Advanced Electronic Technology SA (Ceitec), according to a decree published this Wednesday (8), in the Official Gazette. The state-owned company was created in 2008 to manufacture chips and semiconductors, but has always been dependent on the National Treasury.

According to the decree, an inter-ministerial working group will be formed to assess the “feasibility of reversing the privatization and liquidation of the company” and the “proposal for participation in promoting the research and development policy for semiconductors”. (see in full)

Ceitec was created during Lula’s second government and aimed to become a global player in microelectronics, selling chips and semiconductors to private and state clients. The state-owned company has about 190 employees, more than half of them with postgraduate, master’s and doctoral degrees, who developed and applied for the registration of more than 40 patents.

The factory is located in Porto Alegre and operates in the animal identification, vehicle, heritage and logistics, personnel, development and services segments. According to the company, production totals more than 130 million units, including the chips inserted in Brazilian passports.

According to the decree published this Wednesday (8), the working group will be led by the Ministry of Science, Technology and Innovation (MCTI) with the participation of the Attorney General’s Office, Civil House of the Presidency and Ministries of Management and Innovation in Public Services and Development, Industry, Commerce and Services – the latter commanded by vice-president Geraldo Alckmin (PSB). The collegiate will have 120 days to conclude the studies and present them to the president.

Liquidation did not advance and stopped in court

Ceitec had its privatization proposed by the government of former President Jair Bolsonaro (PL) in 2020, and included in the Investment Partnerships Program (PPI) the following year, along with Eletrobras (privatized in 2022) and the Post Office. However, the liquidation process did not advance after requests for clarification made by the ministers of the Federal Court of Accounts (TCU).

At the time, the then Minister Vital do Rêgo stated that the government did not assess the budgetary risks and did not present plausible justifications for privatization. The company’s liquidation, he says, could have an impact in the order of up to R$620 million.

In the following year, the then Minister of Communications, Fábio Faria, changed his mind and said that the country needed to invest in a semiconductor factory, at the time of the chip crisis that hit the international market. Faria even invited businessman Elon Musk to invest in the business, but the billionaire did not take the proposal forward.

The reversal of Ceitec’s liquidation was mentioned by Lula several times throughout the 2022 election campaign. At the end of last year, the then nominated for the MCTI, Luciana Santos, criticized the Bolsonaro government’s initiative, saying it was “inconceivable that we dismantle what is the cream of innovation in the world”.