The CHIPS Act is one of the most important government initiatives to boost semiconductor production in the United States. Passed in 2022, it was designed to bring chip manufacturing back to the U.S. and reduce reliance on foreign suppliers. This law provides funding and tax credits to help companies build and expand semiconductor factories. It also invests in research and development, workforce training, and supply chain security.
1. The CHIPS Act allocates $52.7 billion in federal funding to boost the U.S. semiconductor industry
The CHIPS Act provides a massive $52.7 billion investment into the semiconductor sector. This funding is meant to encourage companies to build manufacturing plants in the U.S. and strengthen the domestic supply chain.
If you are a business owner or investor in the semiconductor space, this funding presents a golden opportunity. Companies that apply for these funds can receive direct financial support to expand their operations. Startups focusing on chip innovation should also look into available grants and R&D funding.
2. $39 billion is designated for semiconductor manufacturing incentives
The $39 billion earmarked for semiconductor manufacturing incentives under the CHIPS Act represents a significant opportunity for businesses within the U.S. semiconductor sector.
This funding is not just a mere government allocation; it is a strategic investment that can help reshape the landscape of the industry for years to come. For businesses involved in semiconductor manufacturing, whether you’re a startup or an established player, understanding how to capitalize on these incentives is crucial.
Building a Resilient Supply Chain
One of the most powerful aspects of the $39 billion allocation is its potential to help businesses build a more resilient semiconductor supply chain.
Historically, semiconductor manufacturing has been concentrated in a few countries, leaving the U.S. vulnerable to disruptions caused by geopolitical tensions or supply chain bottlenecks. By using this incentive, companies can reduce reliance on foreign production and create a more robust and flexible supply chain within the U.S.
For manufacturers, this could mean building or expanding semiconductor fabrication facilities, often referred to as fabs, within the U.S. With these incentives, businesses can receive the necessary financial support to cover a portion of the construction and operational costs.
This allows companies to grow their domestic production capacity, which not only strengthens their market position but also helps in mitigating future disruptions.
3. $13.2 billion is set aside for R&D and workforce development
The $13.2 billion allocated by the CHIPS Act for research, development (R&D), and workforce development is one of the most pivotal aspects of the legislation, offering a transformative opportunity for businesses in the U.S. semiconductor industry.
This funding promises to reshape the future of innovation and skill-building within the sector, positioning U.S. companies to lead the global semiconductor market. Let’s break down how this investment will benefit businesses in the long run and offer a roadmap for capitalizing on these funds.
Driving Innovation through R&D
At its core, the CHIPS Act recognizes that innovation is the lifeblood of the semiconductor industry.
The $13.2 billion set aside for R&D is poised to fuel advancements in both semiconductor manufacturing and technology. This substantial funding will support a range of initiatives, from developing next-generation chips to improving manufacturing efficiency.
For businesses operating in or entering the semiconductor space, this is an opportunity to stay ahead of the curve.
Those that are proactive in securing R&D grants can explore emerging technologies, whether it’s advancing artificial intelligence (AI) capabilities, enhancing data storage systems, or improving energy efficiency in semiconductors.
The funds are designed not only to advance product development but also to support research that addresses industry-wide challenges, such as supply chain resilience and sustainability.
4. The Act provides a 25% investment tax credit for semiconductor manufacturing
Beyond direct funding, the CHIPS Act offers a 25% investment tax credit for semiconductor manufacturing. This means companies can recover a quarter of their investment in new plants through tax savings.
If your company is planning to build or expand a semiconductor facility, this tax credit can significantly reduce costs. Consulting with a tax expert can help you maximize these benefits.
5. The U.S. share of global semiconductor manufacturing declined from 37% in 1990 to 12% in 2022
Why This Decline Matters for U.S. Businesses
The drop in the U.S. share of global semiconductor manufacturing is not just a statistic—it’s a wake-up call. For decades, the U.S. led the world in chip production, but as more manufacturing shifted overseas, domestic companies became increasingly dependent on foreign supply chains.
This over-reliance became painfully clear during the recent chip shortages, which disrupted everything from auto manufacturing to consumer electronics.
For businesses that rely on semiconductors, this decline means greater risks: longer lead times, higher costs, and vulnerability to geopolitical tensions. But with the CHIPS Act in play, companies now have an opportunity to regain control.
6. Taiwan and South Korea currently produce over 80% of the world’s advanced semiconductors
The dominance of Taiwan and South Korea in semiconductor production is a reality that businesses in the U.S. and globally can no longer ignore.
These two countries account for more than 80% of the world’s advanced semiconductors, a critical component in nearly every modern technology—from smartphones and computers to vehicles and medical devices.
This concentration of semiconductor production has raised serious concerns about the global supply chain’s stability and security, highlighting the strategic importance of semiconductor manufacturing outside of these countries.
The Risk of Over-Reliance on Taiwan and South Korea
The fact that Taiwan and South Korea are responsible for such a large share of global advanced semiconductor production puts businesses in a precarious position.
Any disruption in these regions, whether due to geopolitical tensions, natural disasters, or supply chain bottlenecks, can have a profound impact on the availability and pricing of chips.
This creates a significant risk for businesses relying on these foreign sources for their semiconductor needs.
For U.S. companies, this risk is particularly evident in light of ongoing tensions in the Taiwan Strait and the growing competition between China and the U.S. As the semiconductor industry continues to grow in importance, it becomes increasingly clear that businesses must seek ways to diversify their supply chains.
Diversification isn’t just about securing supply but also about ensuring that companies are not held hostage to external factors outside of their control.
7. The Act aims to create tens of thousands of high-tech manufacturing jobs in the U.S.
The CHIPS Act is expected to create tens of thousands of new jobs in semiconductor manufacturing. These jobs range from engineers and technicians to factory workers.
If you’re looking for career opportunities, now is the time to upskill in semiconductor-related fields. Businesses should also focus on attracting top talent by offering competitive salaries and training programs.
8. Intel announced a $100 billion investment in U.S. semiconductor manufacturing after the Act’s passage
The CHIPS Act has ushered in a new era for the U.S. semiconductor industry, with major players like Intel making groundbreaking moves to capitalize on the incentives offered.
Intel’s announcement of a $100 billion investment in U.S. semiconductor manufacturing is a clear sign of how the Act is reshaping the industry’s landscape. This monumental investment isn’t just a financial commitment; it represents a profound shift in the dynamics of both domestic and global semiconductor production.
For businesses across the semiconductor ecosystem, this development opens up new opportunities and challenges. Let’s explore the implications of Intel’s investment and what it means for companies looking to stay ahead in a rapidly evolving industry.
9. TSMC committed over $40 billion to build chip plants in Arizona
Why TSMC’s Investment in Arizona is a Game Changer
TSMC’s $40 billion investment in Arizona isn’t just a business expansion—it’s a strategic shift that could reshape the global semiconductor supply chain.
As the world’s most advanced chipmaker, TSMC’s decision to build not one, but two fabrication plants (fabs) in the U.S. signals a major rebalancing of where cutting-edge semiconductors are produced.
For businesses, this move means more than just additional chip supply. It marks the beginning of a new era where advanced semiconductor production is no longer concentrated in Asia, reducing the risks of supply chain disruptions and geopolitical uncertainty.
10. Samsung pledged $17 billion for a semiconductor facility in Texas
Samsung is investing $17 billion in a semiconductor plant in Texas, adding to the growing number of U.S.-based chip factories.
If you’re in Texas, this is a great time to explore job opportunities or business partnerships in the semiconductor industry. The demand for skilled workers and suppliers in the region is expected to soar.
11. Micron is investing $100 billion in domestic chip manufacturing over the next 20 years
Micron’s groundbreaking decision to invest $100 billion in domestic chip manufacturing over the next two decades is a game-changer not only for the company but also for the entire U.S. semiconductor industry.
This commitment highlights a key shift in the global semiconductor market and offers numerous opportunities for businesses to capitalize on new developments in the industry. For companies in the tech sector and beyond, Micron’s investment is a signal to act strategically in response to evolving market dynamics.
A Major Leap Toward Strengthening U.S. Semiconductor Production
Micron’s investment underscores the urgency to bring semiconductor manufacturing back to U.S. soil, making the country more competitive on the global stage. The U.S. has long relied on foreign suppliers for its semiconductor needs, but Micron’s bold move helps reduce this dependency.
As one of the largest memory chip manufacturers in the world, Micron’s decision to invest heavily in domestic facilities signals a new era of semiconductor self-sufficiency.
For businesses, especially those in tech, automotive, and telecommunications industries that rely on semiconductor chips, Micron’s investment creates a more predictable supply chain.
This is crucial for long-term planning and risk mitigation, especially in a world where global events such as trade disputes or natural disasters can quickly disrupt international supply chains.
12. The Act aims to reduce U.S. reliance on Chinese semiconductor imports, which account for about 50% of U.S. chip consumption
One of the central goals of the CHIPS Act is to reduce the United States’ reliance on Chinese semiconductor imports, which currently account for around 50% of U.S. chip consumption.
This initiative is not just a response to the challenges posed by global supply chain disruptions but also a strategic move to secure the nation’s technological and economic future.
For businesses in the semiconductor industry and beyond, this shift presents both challenges and significant opportunities to tap into a more resilient and localized supply chain.
Understanding the Need for Reduced Reliance
The U.S. dependence on Chinese semiconductor imports has long been a point of vulnerability. Geopolitical tensions, trade restrictions, and the recent global semiconductor shortages have underscored the risks of relying heavily on foreign suppliers, particularly in critical technologies.
By reducing this dependence, the U.S. can regain control over its semiconductor supply chain, ensuring greater stability, innovation, and economic growth.
For businesses, this change will likely result in more competitive markets, reduced shipping costs, and shorter lead times.
Additionally, fostering domestic production could protect against future supply chain disruptions, a key consideration for companies across industries reliant on chips, from automotive to telecommunications.
13. U.S. semiconductor exports increased by 17% in 2023 due to CHIPS Act incentives
Why This Surge in Semiconductor Exports Matters
The 17% increase in U.S. semiconductor exports in 2023 is not just a statistical boost—it’s a clear indicator that the CHIPS Act is reshaping America’s role in the global semiconductor market. For years, the U.S. relied heavily on foreign manufacturers for chip production, but this shift shows that the tide is turning.
For businesses, this export growth signals stronger domestic production, improved supply chain resilience, and new opportunities to tap into international markets. The companies that position themselves strategically now will benefit from this momentum in the long run.
14. Over $200 billion in private investments have been announced in response to the Act
The announcement of over $200 billion in private investments in response to the CHIPS Act marks a defining moment in the history of the U.S. semiconductor industry.
This massive surge of investment reflects the confidence that both established companies and new players have in the U.S. semiconductor ecosystem. For businesses, this is not just an indicator of growth but a signal of opportunity to be part of the next wave of semiconductor innovation and manufacturing within the U.S.
Unlocking New Opportunities for Collaboration and Growth
The private investments flowing into the semiconductor industry are not only fueling the construction of new facilities and technological advancements but are also creating a fertile environment for collaboration.
For businesses, particularly those in the technology, automotive, and electronics sectors, this influx of capital means more access to cutting-edge semiconductor solutions, new partnerships, and potential joint ventures.
The CHIPS Act has provided a platform for collaboration across different sectors, and as the industry grows, businesses that strategically partner with semiconductor manufacturers and research institutions will be better positioned to innovate and expand their market share.
For instance, businesses in the automotive industry, which are increasingly reliant on semiconductors for everything from electric vehicles to autonomous driving systems, now have an opportunity to forge relationships with chipmakers investing in new manufacturing capabilities.
These partnerships can ensure that businesses gain access to the latest chip technologies that are essential for driving performance, efficiency, and safety in their products.
15. More than 50 new semiconductor manufacturing projects have been announced nationwide
Since the CHIPS Act was passed, over 50 new semiconductor manufacturing projects have been launched across the country. This includes everything from large-scale fabrication plants (fabs) to research and development centers.
For businesses, this growth presents countless opportunities. Construction companies, suppliers of chip-making equipment, and logistics providers will all be in high demand.
If you’re in these sectors, now is the time to expand your capabilities and build relationships with semiconductor firms.
If you’re a local government official or economic developer, you should work to attract semiconductor projects to your area. Many companies are looking for incentives such as tax breaks, infrastructure improvements, and skilled labor pools.
Creating a business-friendly environment can help your region benefit from this semiconductor boom.
16. The CHIPS Act is expected to create 40,000+ direct jobs in the semiconductor sector
Semiconductor manufacturing requires a highly skilled workforce, and the CHIPS Act is projected to create over 40,000 direct jobs in the industry. These jobs include engineers, technicians, and factory workers involved in the design, production, and testing of chips.
If you’re looking for a career change, this is a great time to enter the semiconductor industry. Many universities and technical schools are expanding their programs in semiconductor manufacturing and engineering.
Businesses should also focus on workforce training to ensure they have the talent needed to support expansion.
17. The semiconductor workforce demand in the U.S. is projected to grow by 35% by 2030
By 2030, the demand for skilled semiconductor workers is expected to increase by 35%. This growth will create a significant challenge in hiring and retaining talent.
Companies need to invest in workforce development today to avoid labor shortages in the future. Offering competitive salaries, training programs, and clear career advancement paths will be crucial in attracting top talent.
Governments and educational institutions must also work together to ensure training programs align with industry needs.
For individuals, pursuing careers in chip design, fabrication, and related fields will provide long-term job security. Those with expertise in artificial intelligence, quantum computing, and advanced manufacturing will be particularly in demand.
18. The Act allocates $500 million per year for international semiconductor supply chain cooperation
A critical aspect of the CHIPS Act is its focus on strengthening international supply chains. The law provides $500 million per year to enhance cooperation with allied nations.
For businesses, this presents opportunities to collaborate with global partners in semiconductor research, development, and production. Companies should explore partnerships with European, Japanese, and South Korean firms to leverage shared expertise and resources.
Policymakers should also focus on building strong trade agreements to ensure a stable flow of semiconductor materials and components. With global demand for chips rising, having a resilient supply chain will be key to long-term success.
19. The National Semiconductor Technology Center (NSTC) was created to drive U.S. chip innovation
To maintain leadership in chip technology, the CHIPS Act established the National Semiconductor Technology Center (NSTC). This organization is focused on advancing research and development in semiconductor innovation.
Startups and research institutions should engage with NSTC to access funding, collaborate on breakthrough technologies, and bring new products to market. Businesses should also keep an eye on NSTC developments to stay ahead of emerging trends in chip design and fabrication.
For students and researchers, NSTC provides an opportunity to work on cutting-edge semiconductor projects and gain valuable experience in the field.
20. R&D spending in the U.S. semiconductor industry is projected to increase by 25% by 2025
One of the biggest impacts of the CHIPS Act is the expected increase in semiconductor research and development spending. By 2025, R&D spending in the U.S. semiconductor industry is projected to rise by 25%.
This boost in funding will accelerate the development of next-generation chips, including those used in artificial intelligence, 5G, and quantum computing. If you’re a business involved in semiconductor research, now is the time to apply for grants and seek partnerships with larger companies.
Universities and startups should also explore funding opportunities to develop innovative semiconductor technologies. The companies that invest in R&D today will be the industry leaders of tomorrow.
21. U.S. semiconductor capital expenditures surged 40% year-over-year after the Act’s passage
Investment in semiconductor manufacturing has skyrocketed since the CHIPS Act was passed. In the year following the law’s enactment, capital expenditures in the U.S. semiconductor industry jumped by 40%.
This surge in investment means a rapidly expanding market for suppliers, construction firms, and service providers. Companies in industries such as cleanroom manufacturing, industrial automation, and semiconductor testing should prepare for increased demand.
Investors should also take note—semiconductor stocks are poised for growth, and companies expanding their U.S. presence may offer strong long-term returns.
22. The Act aims to triple U.S. domestic production of leading-edge semiconductors by 2030
Currently, the U.S. produces only a small percentage of the world’s most advanced semiconductors. The CHIPS Act aims to change that by tripling domestic production of leading-edge chips by 2030.
For businesses in the semiconductor supply chain, this means long-term growth opportunities. Companies that provide raw materials, precision tools, and semiconductor equipment should prepare for an increased workload.
For policymakers, achieving this goal will require continued investment in infrastructure, workforce training, and research facilities. Ensuring that U.S. semiconductor fabs have the resources they need will be key to success.
23. The U.S. is targeting 20% of global semiconductor production by 2030, up from 12%
The CHIPS Act is part of a broader strategy to increase the U.S. share of global semiconductor manufacturing. By 2030, the goal is to raise U.S. production to 20% of the world’s total, up from 12% today.
Businesses that want to capitalize on this growth should start positioning themselves now. Semiconductor firms should explore expansion plans, while suppliers should secure long-term contracts with chipmakers.
Investors should also monitor industry trends and consider semiconductor-related stocks and ventures.
24. Over 60% of CHIPS Act funding is expected to be spent by 2026
The U.S. government is moving quickly to distribute CHIPS Act funds, with more than 60% expected to be allocated by 2026.
For businesses, this means acting fast to secure funding and incentives. Companies that delay their applications may miss out on key financial support. Working with experts who understand the application process can help businesses maximize their benefits.
25. The semiconductor supply chain is expected to shorten, reducing chip lead times by 30%
One major advantage of reshoring semiconductor production is a shorter supply chain. The CHIPS Act is expected to reduce chip lead times by 30%, making semiconductor production more efficient and responsive to demand.
For manufacturers, this means better inventory management and fewer disruptions. Companies that rely on semiconductors—such as automakers and electronics manufacturers—should see fewer delays and price fluctuations.
26. The Act includes $2 billion for legacy chips critical to the automotive and defense industries
The $2 billion allocated under the CHIPS Act for legacy semiconductors is a crucial step toward addressing a pressing need in industries like automotive and defense.
These legacy chips, often older and less advanced than their modern counterparts, are essential for a wide range of applications, from controlling vehicle safety systems to supporting critical defense technologies.
The targeted investment in these chips reflects a broader strategy to ensure that the U.S. can maintain its leadership in sectors that rely heavily on older semiconductor technology.
Securing Supply for Critical Industries
Legacy chips may not always be the latest in terms of performance, but they play a pivotal role in industries where reliability and long-term sustainability are more important than cutting-edge innovation.
For businesses in the automotive and defense sectors, these chips are integral to the functioning of a variety of systems—whether it’s in electronic control units (ECUs) for vehicles or guidance systems for defense applications.
By dedicating $2 billion specifically to these chips, the CHIPS Act addresses a significant bottleneck in the supply chain, ensuring that these industries continue to function smoothly without interruption.
For automotive manufacturers, supply chain disruptions for legacy chips have already caused production delays and vehicle shortages. The pandemic exposed how dependent these industries are on a steady supply of these crucial components, and many businesses were left scrambling to find alternative sources.
The funding provided by the CHIPS Act gives companies a strategic advantage by helping them secure the chips needed to keep production lines running.
For businesses in the automotive industry, taking advantage of this funding could help mitigate risks related to chip shortages, ensuring that they can meet consumer demand without sacrificing quality or timelines.
27. Semiconductor-related university funding increased by 40% to support workforce development
The CHIPS Act’s decision to increase semiconductor-related university funding by 40% is a game-changer, not only for academic institutions but also for businesses within the semiconductor industry.
This strategic move signals a clear focus on building the next generation of talent and supporting workforce development at a time when the demand for skilled professionals in the semiconductor sector is skyrocketing.
For businesses, this increased funding presents an opportunity to tap into a growing pipeline of highly trained talent, foster innovation, and build long-term partnerships with academic institutions.
Bridging the Skills Gap with Targeted University Investment
The semiconductor industry is evolving at a rapid pace, with new technologies and manufacturing processes driving demand for a skilled workforce.
However, there has been a noticeable skills gap, with many businesses struggling to find workers with the specialized knowledge and experience necessary to meet the industry’s needs.
By increasing funding for semiconductor-related university programs, the CHIPS Act is directly addressing this challenge. This funding will help universities and technical schools expand their semiconductor programs, improve curricula, and increase hands-on learning opportunities for students.
As a result, businesses will benefit from a future workforce that is better equipped to handle the complexities of modern semiconductor design, manufacturing, and innovation.
For companies, this increased investment in higher education is a golden opportunity to collaborate with universities. By working closely with academic institutions, businesses can help shape the curriculum to better align with industry needs.
This collaboration can also provide companies with early access to top talent before they even graduate, creating a competitive advantage in recruiting.
28. Advanced packaging capabilities in the U.S. are expected to grow 4x by 2030
Why Advanced Packaging Is the Next Big Shift in Semiconductor Manufacturing
The U.S. semiconductor industry isn’t just ramping up chip production—it’s transforming how those chips are assembled and integrated. Advanced packaging, a critical but often overlooked part of semiconductor manufacturing, is set to grow fourfold in the U.S. by 2030.
This shift is more than a numbers game. It’s about positioning the U.S. as a leader in next-generation semiconductor technology. Companies that depend on cutting-edge chips—from AI to automotive to defense—will soon have access to domestically produced, high-performance packaged semiconductors, reducing reliance on overseas suppliers and mitigating supply chain risks.
29. The U.S. semiconductor industry contributes over $250 billion annually to GDP
The semiconductor industry is a key driver of the U.S. economy, contributing over $250 billion annually to the nation’s GDP. This figure is expected to rise significantly as the CHIPS Act accelerates domestic production, R&D, and supply chain expansion.
For businesses, this means a growing market with increasing opportunities. Semiconductor manufacturers, suppliers, and service providers should prepare for sustained growth and explore strategic partnerships to scale operations.
Local governments should also recognize the economic benefits of attracting semiconductor investments. Offering tax incentives, infrastructure support, and workforce development programs can help regions benefit from the booming semiconductor sector.
30. The CHIPS Act is expected to reduce U.S. semiconductor trade deficits by $50 billion annually
One of the biggest economic benefits of the CHIPS Act is its potential to reduce the U.S. semiconductor trade deficit by $50 billion per year. By increasing domestic production, the U.S. will rely less on imported chips, strengthening economic independence and national security.
For businesses that import semiconductors, this shift presents an opportunity to switch to domestic suppliers. Establishing relationships with U.S.-based chip manufacturers can help companies secure more stable supply chains, reduce costs, and avoid geopolitical risks.
Policymakers should continue working on trade agreements that support U.S. semiconductor exports. By expanding international market access for American-made chips, the U.S. can further reduce its trade deficit while strengthening its position as a global semiconductor leader.
wrapping it up
The CHIPS Act is a once-in-a-generation investment that is transforming the U.S. semiconductor industry. By injecting billions of dollars into manufacturing, research, and workforce development, it is reshaping how chips are made, who makes them, and where they are produced.
