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Why American Companies Need to Ramp up Production of Semiconductors

By October 7, 2022April 28th, 2023No Comments

By William Bonar 

Semiconductors are the brains of modern electronics; an essential component of devices and great enablers in the fields of communications, computing, healthcare, military systems, transportation, and clean energy.

Currently, the United States is a global leader in chip research and design. However, today, East Asia dominates semiconductor manufacturing, producing 75% of the world’s supply. All but one of the top 10 semiconductor companies by market share, are based in the Asia-Pacific region, with only one US company within the top 10. The increased demand during the COVID-19 pandemic, which has caused serious supply chain issues and further complicated by the situation in Ukraine, have highlighted the dire need – as well as the benefits – for U.S. manufacturers to produce more semiconductors here at home.

In August 2022, at the urging of the Biden Administration, Congress passed the CHIPS and Science Act to strengthen American manufacturing and semiconductor industry leadership, allocating $52.7 billion for domestic semiconductor research, development, manufacturing, and workforce development, which also includes $39 billion in tax incentives.

After the Act passed, leading U.S. semiconductor manufacturers, like Intel and Micron, invested billions of dollars into new factories, resulting in increased job growth. Specifically, Micron created up to 40,000 new jobs in construction and manufacturing, and Intel is projected to create 3,000 corporate jobs and 7,000 construction jobs due to these new builds.

The new focus and drive to increase production of the latest generation of semiconductor devices has also attracted foreign investment in U.S. production capability. TSMC (Taiwan Semiconductor Manufacturing Company) recently completed the initial building phase of its new facility in Phoenix, Arizona, with mutual understanding and commitment of support from the federal government and the State of Arizona. The new facility will produce some of the world’s most advanced semiconductor devices utilizing TSMC’s latest 5 nanometer processes, in addition to producing 1,600 direct high-tech jobs and thousands of further support jobs in the region. The investment is projected to reach $12 billion over the next five or six years.

Legislation like the CHIPS and Science Act reduces U.S. reliance on foreign countries and enhances global competitiveness, which chip production companies like Qualcomm and GlobalFoundries are starting to explore. Qualcomm, which primarily manufactures semiconductors in Taiwan, announced plans to increase semiconductor production in the U.S. by up to 50% over the next five years. GlobalFoundries, the world’s third-largest semiconductor manufacturer after TSMC, recently partnered with Qualcomm to manufacture chips in an expansion of the company’s upstate New York facility, which required a $4.2 billion investment.

Private investments like these are aiding in the reduction of U.S. reliance on semiconductors manufactured abroad, while boosting economic growth.

U.S. companies now have the right opportunities and incentives to drive the country forward as a leading manufacturer of semiconductors and in the areas of chip research and design, which will result in the creation of more jobs, decrease reliance on Taiwan and China, and increase the overall efficiency of the supply chain.

American-based Dalrada Precision Manufacturing and its subsidiary, Deposition Technology (DepTec), are building end-to-end manufacturing solutions with in-house capabilities to deliver the finest machine parts and components available. Additionally, by providing exclusive parts and services for semiconductor and micro-electromechanical systems (MEMS), this specialized division is committed to meeting the world’s growing demands for precision microchips and semiconductors through rigorous research, development, manufacturing, and effective supply chains.

Dalrada Precision Manufacturing is committed to increasing its level of U.S. support for process systems, parts, service, and training for the domestic market.


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