CHIPS Act is raising US share of global production, says report

CHIPS Act is raising US share of global production, says report

Market news |
By Peter Clarke

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US wafer fab manufacturing capacity is projected to triple between 2022 and 2032, the largest percentage rise in the world, according to a report prepared by Boston Consulting Group.

BCG prepared the report for the US Semiconductor Industry Association. It concludes that policy efforts to reduce dependence on Asia-based suppliers of chip manufacturing capacity are working, particularly in the US but also to a lesser degree in Europe.

The report projects around $2.3 trillion in semiconductor capital expenditure over the period 2024 to 2032, compared to $720 billion in the decade prior to enactment of the US CHIPS Act (2013-2022).

Share of global semiconductor capex by location, 2024 to 2032. Source: SIA, Boston Consulting Group.

BCG expects the US to capture 28 percent of capex between now and 2032. This will be second only to Taiwan which will take 31 percent of capex. Europe will be on a par with China with 7 percent each.

As a result, the US will triple is capacity in terms of wafer starts per month (WSPM). Europe is expected to double its manufacturing capacity roughly in line with percentage increase in South Korea.

Global 200mm-diameter and higher fab capacity by region 1990 to 2032F. Source: SIA, Boston Consulting Group.

However, all this spending will be necessary just to make a small change in the global production shares. The US is expected to go from 10 percent of global production in 2022 to 14 percent in 2032. Europe will increase from 8 percent of global production to 9 percent,over the same period. This is a long way short of the 20 percent share the European Union politicians have said they want to achieve. Meanwhile Japan, China’s and Taiwan’s production shares will dip.

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 percent of global capacity by 2032, up from 0 percent in 2022.

Global fab capacity by region and technology category 2022 and 2032F. Source: SIA, Boston Consulting Group.

While finding that US initiatives such as the CHIPS and Science Act have been successful the report notes that most other regions have started similar technology resilience support schemes.

The report finds that the US still faces vulnerabilities in segments of the supply chain, including advanced logic, legacy chips above 28nm, memory, advanced packaging and materials.

It calls for the US to extend the CHIPS Act both in time and to cover chip design and also to improve the pipeline of STEM graduates able to work in the semiconductor in the US.

Related links and articles:

Boston Consulting Group report

News articles:

Micron says US CHIPS money will underpin US$50 billion spend

US pulls back on CHIPS Act R&D funding

Report: Samsung plans third Texas wafer fab at US$24 billion cost

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