New SIA Report Offers Policy Blueprint for Facilitating Global Semiconductor Investment

by Mary Thornton, Vice President, Global Policy

Semiconductors, the chips at the heart of modern technology, power just about every sector of the global economy. Innovation in key end-markets—such as AI, automotive, and industrial—are expected to propel the semiconductor industry to $1 trillion by 2030. To meet increasing demand for chips, semiconductor companies are committing billions of dollars in new investments over the next decade. At the same time, semiconductor supply chains are increasingly vulnerable to disruption, leading chip firms to diversify risk by expanding their operational footprint globally. In turn, governments around the world are seeking to improve their countries’ business and investment climate to attract and facilitate new semiconductor projects.

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Today, SIA and the Boston Consulting Group (BCG) released a report, “Attracting Chips Investment: Industry Recommendations for Policymakers.” The report identifies the following five primary factors that impact investment decisions for semiconductor companies and provides actionable recommendations for governments seeking to grow their domestic semiconductor industry:

1. Investment and operational costs: Semiconductor development, in both design and manufacturing, is expensive. In evaluating site options, companies thoroughly analyze site-specific costs, including land, utilities, equipment, materials, labor, and taxes. Government support programs that are simple, flexible, and offset construction and equipment costs are attractive to semiconductor investors.
2. Workforce: Semiconductor companies require access to a large technical workforce. They seek countries where the education system and public-private partnerships coalesce to generate a rich talent pipeline—from technicians and skilled trades to PhD-level engineers and scientists. Governments that adopt comprehensive workforce development and labor policies to build an industry-ready talent pipeline will be well-placed to draw investment from the semiconductor industry and other strategic technology sectors.
3. Infrastructure: Safe, reliable, and cost-efficient water, utilities, communications, and transportation infrastructure are critical for semiconductor operations. Small interruptions in operations can incur significant costs. Governments should invest in electricity grids that are able to maintain day-to-day stability, provide a portion of energy from green sources, and ensure communications and transportation networks are sufficient to support semiconductor industry needs.
4. Regulatory and trade environment: Semiconductor supply chains are concentrated in countries with market-friendly trade policies, and regulatory frameworks that respect intellectual property rights and trade compliance. Policymakers can facilitate semiconductor investments by implementing policies that minimize trade and permitting costs, streamline administrative processes, and facilitate the movement of semiconductors products and data.
5. Integrated ecosystems: Semiconductor companies thrive on vibrant ecosystems that cluster suppliers, customers, R&D partners, educational partners, and innovative talent.

Governments seeking to present their countries as a destination for semiconductor companies to invest must move quickly and deliberately to take advantage of this window of opportunity, mindful that other governments are competing for such investments.

By implementing the policy recommendations set out in this blueprint, governments can position their countries to attract chip ecosystem investments that complement industry operations in the United States, and drive greater security, resilience, and diversification in global semiconductor supply chains.