May 9, 2024: Today, the Semiconductor Industry Association (SIA), in collaboration with the Boston Consulting Group (BCG), unveiled a report focusing on the worldwide chip supply chain. According to the findings, the United States is poised to witness a remarkable threefold expansion in its domestic semiconductor manufacturing capacity by 2032, a surge initiated in 2022 with the enactment of the CHIPS and Science Act (CHIPS). This projected growth of 203% stands out as the most substantial percentage increase anticipated globally during this period.

The report, titled "Emerging Resilience in the Semiconductor Supply Chain," forecasts significant developments in the U.S. semiconductor sector. It predicts that by 2032, the U.S. will boost its share of advanced logic manufacturing (below 10nm) to 28% of global capacity, a substantial increase from 0% in 2022. Moreover, the U.S. is expected to claim 28% of total global capital expenditures (capex) from 2024 to 2032, ranking second only to Taiwan, which is projected to capture 31%. Without the CHIPS Act, the U.S. would have secured just 9% of global capex by 2032, according to the findings.

The report highlights that industry investments, supported by CHIPS incentives, are set to rejuvenate semiconductor manufacturing in the U.S. and reinforce domestic chip supply chains. Additionally, it outlines policy measures aimed at further enhancing supply chains, boosting R&D and chip design, expanding the semiconductor workforce, and ensuring that the CHIPS Act maximizes its benefits for America's economic and national security.

The report also highlights the potential risks associated with industrial policies that could inadvertently create bottlenecks and increase supply chain vulnerabilities. It cautions against non-market-based investments resulting from incentive programs and large-scale industrial policies, which may lead to overconcentration or oversupply in certain segments of the semiconductor supply chain. Instead, government incentives should prioritize enabling targeted, distributed, and market-based investments.

Moreover, the study underscores the concerted efforts of governments and companies to enhance resilience in the semiconductor industry. For instance, the U.S. CHIPS Act has allocated USD 39 billion in incentives for semiconductor manufacturing, accompanied by an advanced manufacturing investment tax credit. Similarly, the European Union has introduced its own version of the CHIPS Act, while China has launched the third phase of its Integrated Circuit (IC) Industry Investment Fund. Various incentive programs have also emerged in countries like Taiwan, Korea, Japan, India, and others. Additionally, companies have made significant investments in both established and emerging regions.

Looking ahead, the report projects a substantial increase in capital expenditure (capex) in the semiconductor industry, reaching around USD 2.3 trillion from 2024 to 2032 compared to $720 billion in the preceding decade. Despite progress in strengthening U.S.-based semiconductor manufacturing, the report emphasizes the need for further government policy actions to address lingering supply chain vulnerabilities and ensure continued growth in fabrication capacity. Additionally, efforts are required to enhance America's competitiveness in areas such as advanced logic, design, electronic design automation (EDA), and equipment, particularly in the face of intensifying global competition.

The manufacturing incentives under the CHIPS Act have spurred significant investment announcements in the United States. Semiconductor companies have unveiled over 80 new projects across 25 states in the U.S., representing nearly USD 450 billion in private investments since the introduction of the CHIPS Act. These announced projects are expected to generate over 56,000 jobs within the semiconductor ecosystem and provide support for hundreds of thousands of additional jobs across various sectors of the U.S. economy.