A Rapidly Growing US Semiconductor Industry: Significant Investments in Infrastructure Bolstered by the CHIPS Act

The global semiconductor industry is witnessing one of the biggest investment booms in the history of technology, with the potential to seismically shift the center of gravity for where chips are manufactured. Rising demand is coming from core sectors such as automotive, consumer electronics, and data centers, as well as rapid advancements in technologies like 5G, artificial intelligence, and the Internet of Things. Chip shortages experienced in recent years and ongoing geopolitical tensions have also placed a heightened focus on supply chain resilience and security. This is prompting increased investments into expanding manufacturing capacity, improving the diversity of suppliers, and enhancing chip design and fabrication capabilities.

Mckinsey estimates that an approximately $600 billion global semiconductor industry will grow 6-8% per year for the remainder of the decade, resulting in a $1 trillion industry by 2030. Governments and private entities worldwide have recognized the strategic importance of the semiconductor industry and have actively engaged in investment endeavors to foster its growth. Numerous countries are implementing policies and initiatives aimed at fortifying domestic semiconductor capabilities, reducing dependence on imports, and promoting innovation. These initiatives encompass funding research and development, establishing semiconductor manufacturing facilities, and facilitating collaborations among academia, industry, and government stakeholders. In particular, tensions between the U.S. and China have also reverberated across the global supply chain, resulting in increased governmental restrictions on the sale of select chips and manufacturing technologies to China.

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