MEMS and Sensors

US on track to produce about 20% of logic chips by 2030

28 February 2024
There are virtual no logic chips manufactured in America currently. Growing to 20% would represent a major milestone in bringing domestic semiconductor manufacturing back to the U.S. Source: Intel

U.S. Commerce Secretary Gina Raimondo said that America is on track to produce about 20% of the world’s logic semiconductors by the end of the decade.

Raimondo added companies looking to build new semiconductor fabs, packaging facilities and assembly factories have requested more than $70 billion in federal subsidies through the CHIPS and Science Act, which was signed into law by President Biden in 2022.

This is roughly twice the amount of funding that is available. More than 600 companies have submitted interest in funding, Raimondo said.

The CHIPS Act has released funding for three projects so far: $35 million to BAE Systems; $162 million to Microchip Technology; and $1.5 billion to GlobalFoundries earlier this month for expansion of fabs in the U.S. However, it is expected that Intel Corp. will also receive funding in the coming weeks, according to CEO Pat Gelsinger.

“Our investments in leading-edge logic chip manufacturing will put this country on track to produce roughly 20% of the world’s leading-edge logic chips by the end of the decade,” Raimondo said. “That’s a big deal. Why is that a big deal? Because folks, today we’re at zero.”

AI investments

Raimondo echoed the sentiment made by Intel earlier this month that artificial intelligence (AI) will be the most important technology for decades to come including the advancement of AI semiconductors.

"You can't lead on AI if you don't believe in making leading-edge chips," Raimondo said. "And so our work in implementing chips have just got a whole lot more important."

During Intel Direct Connect, Raimondo was asked if a second CHIPS Act would be necessary to continue to push supply chain diversification and reach one-third of global chip manufacturing. While she declined to comment on a second CHIPS Act, she said that once the funding from the original act is distributed it is likely another type of funding will be needed to continue the momentum.

If AI is not funded in the original CHIPS Act, it will likely be a staple in whatever comes after.

Why it matters

When COVID-19 hit, lockdowns and the economic issues that followed caused major disruptions in the supply chain for semiconductors. Seeing a way to bring back domestic semiconductor manufacturing to the U.S., organizations, companies and the government worked to create subsidies and incentives to build new chip fabs on U.S. soil.

The idea is not just to generate new sources of revenues for the country and vendors but to shore up national security for microelectronics as well as diversify regionally in case another pandemic hits or geopolitical event cripples part of the supply chain.

The U.S. is just one of numerous territories taking similar initiatives to expand the supply chain regionally. Japan and Europe are also increasing funding for subsidies for vendors looking to build new chip fabs.

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