Team Blitz India
The Semiconductor Industry Association (SIA), in partnership with the Boston Consulting Group (BCG), has released a report on the global chip supply chain that 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% growth is the largest projected per cent increase in the world over that time.
The study, titled “Emerging Resilience in the Semiconductor Supply Chain,” also projects the U.S. 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 (capex) 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 incentives—are on track to reinvigorate semiconductor manufacturing in America and reinforce 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 analyses the efforts underway in other countries to incentivise chip production and innovation and the criticality of ensuring chip companies have open access to global customers and suppliers, among other topics.
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 U.S. 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.
