CHIPS Act Boosting US Global Production Share: Report

Recent findings from a report prepared by Boston Consulting Group (BCG) for the US Semiconductor Industry Association reveal promising developments in the efforts to reduce reliance on Asia-based suppliers for chip manufacturing. The report indicates that these policy initiatives are showing positive results, particularly in the United States and to a lesser extent in Europe.

The report projects a significant increase in semiconductor capital expenditure, estimating around $2.3 trillion from 2024 to 2032. This marks a substantial rise compared to the $720 billion spent in the decade preceding the enactment of the US CHIPS Act in 2013.

According to the data presented in the report, the US is expected to capture 28 percent of the global semiconductor capital expenditure between now and 2032, positioning it as the second-largest recipient after Taiwan, which is projected to receive 31 percent. Europe and China are forecasted to have equal shares of 7 percent each.

As a result of these investments, the US is anticipated to triple its manufacturing capacity in terms of wafer starts per month (WSPM), while Europe is expected to double its capacity, aligning closely with the percentage increase projected for South Korea.

Despite the substantial capital expenditure, the report suggests that these efforts will only result in a modest shift in global production shares. By 2032, the US is forecasted to increase its global production share from 10 percent in 2022 to 14 percent, while Europe is expected to rise from 8 percent to 9 percent over the same period, falling short of the European Union's target of 20 percent.

The study, titled “Emerging Resilience in the Semiconductor Supply Chain,” also highlights the projection that the US will grow its share of advanced logic manufacturing to 28 percent of global capacity by 2032, a significant increase from 0 percent in 2022.