Strategic Innovation: Strengthening U.S. chip manufacturing will help ensure America out-innovates the world in the strategic technologies of the future – AI, 5G, quantum computing, and more – that will determine global economic and military leadership for decades to come.
Secure Supply Chains: Producing more semiconductors domestically also would make America’s semiconductor supply chains more resilient to future crises and ensure the U.S. can domestically produce the advanced chips needed for our military and critical infrastructure.
Finding 2: The share of global semiconductor manufacturing located in the U.S. has plummeted in recent decades, mostly because competing governments offer large incentives and the U.S. does not.U. S. Decline: U.S. companies account for 48% of the world’s chip sales, but U.S.-located fabs only account for 12% of the world’s semiconductor manufacturing, down from 37% in 1990.
Asia’s Rise: 75% of the world’s chip manufacturing is concentrated in East Asia. China is projected to have the world’s largest share of chip production by 2030 due to an estimated $100 billion government subsidies.
Incentive Gap: Depending on the type of fab, a new fab in the U.S. costs approximately 30% more to build and operate over 10 years than one in Taiwan, South Korea, or Singapore, and 37-50% more than one in China. As much as 40-70% of that cost differential is directly attributed to government incentives.
National Security: Incentives are needed to strengthen our defense industrial base and provide domestic capabilities in chip fabrication to satisfy America’s national security needs. Establishing on-shore capabilities to produce microelectronics for national security and critical infrastructure would improve the resiliency of our supply chains and re-balance the military’s current reliance on off-shore production.
Economic Security and Growth: Federal manufacturing grants and tax breaks totaling $20-50 billion would re-position the U.S. from an unattractive investment destination to the most attractive (excluding China) and create as many as 19 new major semiconductor manufacturing facilities (fabs) in the U.S. over the next 10 years, a 27% increase over the current number of U.S. commercial fabs (70).
New Jobs: Federal manufacturing incentives would create up to 70,000 high-paying jobs in the U.S., ranging from highly educated engineers to fab technicians and operators to material suppliers.
