The U.S. is forecast to increase its domestic chip manufacturing by 203 percent in the decade following its enactment of the CHIPS and Science Act—the largest projected percent increase in the world over that time.
WASHINGTON—A report released in May by the Semiconductor Industry Association (SIA) in partnership with the Boston Consulting Group (BCG) projects the United States will triple its domestic semiconductor manufacturing capacity from 2022—when the CHIPS and Science Act (CHIPS) was enacted—to 2032.
The projected 203 percent growth is the largest projected percent increase in the world over that time. If achieved, it would be the first time in decades that the U.S. had expanded its share of the world’s total fab capacity, according to a release from SIA.
The study, titled “Emerging Resilience in the Semiconductor Supply Chain,” projects the U.S. will grow its share of advanced logic (below 10nm) manufacturing to 28 percent of global capacity by 2032, up from 0 percent in 2022. America is also projected to capture more than one-quarter (28 percent) of total global capital expenditures (capex) from 2024 to 2032, ranking second only to Taiwan (31 percent). In the absence of the CHIPS Act, the U.S. would have captured only 9 percent of global capex by 2032, according to the SIA/BCG report.
The report finds that investments from the industry—facilitated by CHIPS incentives—are on track to reinvigorate semiconductor manufacturing in America and reinforce U.S. chip supply chains. But it also identifies policy actions that could further strengthen supply chains, support R&D and chip design, grow the semiconductor workforce, and ensure CHIPS delivers maximum benefits to America’s economic and national security, according to the release.
The report also analyzes the efforts underway in other countries to incentivize chip production and innovation, and the criticality of ensuring that chip companies have open access to global customers and suppliers, among other topics.
“Effective policies, such as the CHIPS and Science Act, are spurring more investments in the U.S. semiconductor industry,” said Rich Templeton, chairman of the board at Texas Instruments and SIA board chair. “These investments will help America grow its share of global semiconductor production and innovation, furthering economic growth and technological competitiveness. Continued and expanded government-industry collaboration will help ensure we build on this momentum and continue our next steps forward.”
America’s 203 percent projected increase in fab capacity from 2022 to 2032 stands in stark contrast to its modest 11 percent increase from the previous decade (2012-2022), which ranked last among all major chip-producing regions, according to the report. The U.S. share of the world’s chip manufacturing capacity is projected to increase from 10 percent in 2022, to 14 percent by 2032. In the absence of CHIPS enactment, the U.S. share would have slipped further to 8 percent by 2032, according to the report.
The report stated that the U.S. continues to lead the world in its overall contribution to the global value chain, with strong leadership positions in high value-added areas of semiconductor technology. These areas are reported to include chip design, electronic design automation (EDA), and semiconductor manufacturing equipment.
The study is also said to highlight the ways in which governments and companies are taking concerted action to increase resilience.
The U.S. CHIPS and Science Act committed $39 billion in incentives for semiconductor manufacturing, plus a separate advanced manufacturing investment tax credit. The European Union unveiled the European CHIPS Act, China initiated the third phase of its Integrated Circuit (IC) Industry Investment Fund, and various other incentive programs have emerged in Taiwan, Korea, Japan, and India. In parallel, companies have made significant investments in established and new regions. The report projects approximately $2.3 trillion in capex in 2024-2032, compared to $720 billion in the decade prior to enactment of the CHIPS Act (2013-2022).
Despite the progress made to strengthen U.S.-based semiconductor manufacturing, additional government policy actions are needed to help ensure America stays on track to address lingering supply chain vulnerabilities and grow its share of fabrication capacity, the release stated. At the same time, as global competition continues to grow, the U.S. needs to increase its strength in areas such as advanced logic, design, EDA, and equipment, according to the release.
“The CHIPS and Science Act has put America on course to significantly strengthen domestic semiconductor production and R&D, but more work is needed to finish the job,” said John Neuffer, SIA president and CEO, in the release. “We look forward to working with government leaders to advance policies that broaden the STEM talent pipeline, invest in scientific research, promote free trade and access to global markets, and expand and extend critical CHIPS incentives.”