MEMS and Sensors

Can the US reach one-third of global chip manufacturing?

08 March 2024
An Intel engineer inside a cleanroom of a semiconductor fab. Intel is one of many companies along with the government seeking to bring semiconductor manufacturing back domestically to shore up national security and national economy as well as explore new revenue opportunities. Source: Intel

Since the COVID-19 pandemic, the U.S. has been on a path to rebuild its semiconductor manufacturing presence in the world.

Semiconductor vendors like Intel Corp., trade organizations and the government have gone on record that the goal is to reach one-third of the global chip making in a decade or less. But how do they intend to make this happen and why is it such a big deal after many decades of semiconductor manufacturing being aggregated in Asia?

COVID’s impact

In the 1980s, the U.S. controlled about 50% of global semiconductor manufacturing. But back in the 80s, not nearly as many devices needed complex microchips whereas today all device consumers use or drive or connect to use these chips. Today, the U.S. manufactures only about 8% of semiconductors globally, according to the Semiconductor Industry Association (SIA).

Why it matters is that everything from the economy, the military, automotive, consumer, computer and more all rely on semiconductors. The U.S. government now considers semiconductors a matter of national security as well as economic stability.

When COVID-19 caused lockdowns globally, the supply chain took a massive hit, leading to chip shortages for critical infrastructure, consumer goods and the automotive industry. It caused many vendors to scramble to seek alternatives to sourcing chips leading to a rise in counterfeit chips and soaring average selling prices.

While an opportunity for new revenue sources was realized, COVID also showed the semiconductor supply chain needed to be more diverse in the event future geopolitical issues or other pandemics emerge. The theory is if a more regional supply chain exists it would be more resilient to fluctuations that happen globally, and the impact would be lessened from these events.


The largest effort to reach this goal of one-third domestic semiconductor manufacturing was the signing of the CHIPS and Science Act in 2022. This act set aside about $35 billion in direct subsidies for fab building in the U.S. and an additional $200 billion for R&D, packaging and assembly facilities and technology.

So far, the CHIPS Act has funded:

Additionally, $5 billion has been allotted from the CHIPS Act was released for investment in chip R&D. This included the establishment of the National Semiconductor Technology Center, which will bring together government, industry, labor, customers, suppliers, educational institutions, entrepreneurs and investors. The endeavor aims to accelerate the pace of new innovations to the semiconductor supply chain.

Another 31 Tech Hubs have been approved by the CHIPS Act, which are designed to create jobs, increase R&D and commercialize and deploy technology to advance America’s scientific competitiveness.

According to the SIA, dozens of new projects have emerged in America totaling more than $220 billion in private investments since the CHIPS Act was introduced. These projects will create more than 40,000 jobs in the chip ecosystems and support thousands of additional U.S. jobs in the U.S. economy, the SIA said.

New fabs

As a result of the CHIPS funding, a range of new fabs are coming to America from both domestic and foreign vendors.

Samsung is building a new fab in Texas, while TSMC is building two fabs in Arizona. Intel has plans to build four new fabs in America; two in Ohio and two in Arizona.

Other projects include:

  • Micron Technology — A new fab in Boise, Idaho, with a $15 billion investment.
  • Micron Technology — Possibly four fabs in Clay, New York, with a $20 billion investment.
  • Texas Instruments — Four fabs in Sherman with a potential $30 billion investment.
  • SkyWater — A new facility in West Lafayette, Indiana, with a $1.8 billion investment.
  • NHanced — A new facility in Odon, Indiana, for $236 million.
  • Trusted Semiconductor Solutions — Also in Odon, Indiana, for $34 million.
  • Wolfspeed — A new factory in Chatham County, North Carolina, for $5 billion.
  • Rogue Valley Microdevices — A new facility in Medford, Oregon, for $44 million.
  • Amkor Technology -—A $2 billion assembly and test facility in Peoria, Arizona.

Now, many of these projects hinge on the potential of getting CHIPS Act subsidies from the government, however, many may proceed regardless.

Recently, U.S. Commerce Secretary Gina Raimondo said it has received about $70 billion in requests for funding from the CHIPS Act from over 600 companies, this is about twice the amount of funding that is available.

How to get to one-third

Already, the U.S. is on track to manufacture 20% of all logic chips by the year 2030, Raimondo recently said. This is up from virtually zero manufacturing of logic chips currently.

This growth in this semiconductor sector comes from investments from the CHIPS Act and other private investments.

When the CHIPS Act has run its course, it will be necessary to continue to push supply chain momentum in the U.S. While a second CHIPS Act is not confirmed, Raimondo said another type of funding will be needed to reach this milestone of one-third of all global semiconductor manufacturing.

Artificial intelligence (AI) is something that will be very important for decades to come in the semiconductor sector and Raimondo aims to have the U.S. lead in the development of these chips. If AI is not funded in the current CHIPS Act, it will likely be staple of whatever comes after.

Reshoring will also be an important area to increase the manufacturing, assembly, testing and packaging of chips. Reshoring is the process of bringing manufacturing and services back to the U.S. from overseas.

New investments in the U.S. by domestic and foreign companies are accelerating reshoring trends because of the Inflation Reduction Act (IRA) and CHIPS Act. This is coupled with the risks of a Taiwan-China conflict or China voluntarily decoupling as well as other destabilizing forces causing potential vulnerabilities in the supply chain.

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