As the U.S. grapples with an ongoing chip shortage, the government is investing billions in semiconductor investments, domestically via the CHIPS and Science Act, and abroad.
Most semiconductor supply chain issues are being seen in the automotive sector, financial firm S&P Global Mobility said in a July 2023 blog post. Yet demand for semiconductors in electric vehicles is slowly increasing as auto companies adapt to their new production schedules, which will also translate over to the mobile and electronics sectors, S&P said.
To combat these supply chain challenges, Congress has been taking action to draw in more investments from foreign entities.
In December, the U.S. Senate passed a bill that would attract foreign investments to expand and strengthen domestic semiconductor production and supply chains.
The legislation, dubbed the Securing Semiconductor Supply Chains Act of 2023, would order the SelectUSA program to work with federal agencies and state economic development organizations to develop strategies for attracting foreign investments toward chipmakers and supply chains in the U.S.
The bill, introduced by Sen. Gary Peters, would also help reduce dependence on foreign producers for chips and create jobs in the U.S., the senator said in a statement
“The supply chain for semiconductors is complex and global,” the Senate bill states. “While the United States plays a leading role in certain segments of the semiconductor industry, securing the supply chain requires onshoring, reshoring, or diversifying vulnerable segments, such as for fabrication, advanced packaging, materials and equipment used to manufacture semiconductor products.”
The bill would also help reduce dependence on foreign producers for chips and create jobs in the U.S., Peters said in a statement.
The SelectUSA program is housed in the Department of Commerce's International Trade Administration. The initiative focuses on bringing investments to the U.S. as well as guiding companies and economic development organizations with federal regulations, according to its website.
Since the start of Biden’s presidency, SelectUSA has helped 25 semiconductor client investments valued at $59.7 billion, which is also expected to create 8,831 jobs, an ITA spokesperson told Manufacturing Dive in an email.
Foreign direct investment in the manufacturing sector brought in $2.1 trillion and was the leading industry by the end of 2021, according to a U.S. Bureau of Economic Analysis. Foreign-owned manufacturing affiliates also created over 2.8 million jobs in 2020.
Between 2003 and 2020, China led the world with semiconductor foreign direct investments with $96.7 billion in projects, according to a May 2023 report by financial firm fDi Intelligence. However, as of 2021, the U.S. now leads with $52 billion and China with $6.5 billion.
As for the top semiconductor investors, fDi Intelligence reported that Intel, Taiwan Semiconductor Manufacturing Co. and Samsung were the three heavyweights. And since the CHIPS and Science Act was enacted in August 2022, many companies, both foreign and domestic, have announced billions of dollars in manufacturing projects, including the three chip titans.
The Department of Commerce began awarding grants in December. Its first recipient was England-based BAE Systems, worth $35 million. The defense and aerospace contractor will utilize the funds for its microelectronics center in Nashua, New Hampshire.
