WASHINGTON – The US will triple its domestic semiconductor manufacturing capacity from 2022 – when the Chips Act was enacted – by 2032, the Semiconductor Industry Association projects in a new report.

The projected 203% growth is the largest projected percent increase in the world over that time.

Developed in partnership with the Boston Consulting Group, the study, titled “Emerging Resilience in the Semiconductor Supply Chain,” also projects the US will grow its share of advanced logic (below 10nm) manufacturing to 28% of global capacity by 2032, up from 0% in 2022. Additionally, America is projected to capture over one-quarter (28%) of total global capital expenditures from 2024-2032, ranking second only to Taiwan (31%). In the absence of the Chips Act, the US would have captured only 9% of global capex by 2032, according to the report.

While the report finds investments from the industry – facilitated by Chips Act incentives – are on track to reinvigorate semiconductor manufacturing in America and reinforce US chip supply chains, it also identifies policy actions that will 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.

The report also analyzes the efforts underway in other countries to incentivize chip production and innovation and the criticality of ensuring 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. These investments will help America grow its share of global semiconductor production and innovation, furthering economic growth and technological competitiveness," said Rich Templeton, chairman of the board at Texas Instruments and SIA board chair. "Continued and expanded government-industry collaboration will help ensure we build on this momentum and continue our next steps forward."

Other key report findings:

• America’s world-leading 203% projected increase in fab capacity from 2022 to 2032 stands in stark contrast to its modest 11% increase from the previous decade (2012-2022), which ranked last among all major chip-producing regions, according to the SIA/BCG report.
• The US share of the world’s chip manufacturing capacity will increase from 10% in 2022 to 14% by 2032, marking the first time in decades the US has grown its domestic chip manufacturing footprint relative to the rest of the world. In the absence of the Chips Act's enactment, the US share would have slipped further to 8% by 2032, according to the report.
• The US 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, including chip design, electronic design automation (EDA), and semiconductor manufacturing equipment.

The report also finds industrial policies have the potential to create additional bottlenecks that increase supply chain risk. Certain segments of the semiconductor supply chain are at risk if incentive programs and large-scale industrial policies lead to non-market-based investment, which can result in overconcentration or oversupply. Government incentives should focus on enabling targeted, distributed, market-based investments.

Further, the study highlights the ways in which governments and companies are taking concerted action to increase resilience. The US Chips 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, India, and around the world. In parallel, companies have made significant investments, in both established and new regions. The report projects around $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 US-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, while also increasing its strength in areas such as advanced logic, design, EDA, and equipment in the face of growing global competition.

"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. "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."

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