The US and Mexico are investing heavily in microchip manufacturing to reduce reliance on Asia and establish a strong North American chip production hub.
As the U.S. strives to develop stronger regional supply chains for several key components supporting the green transition , both the U.S. and Mexico are constructing large-scale microchip manufacturing facilities.
The U.S. is increasingly looking to move away from its dependence on China for critical minerals and manufactured components vital to a green transition. North America is expected to become a major hub for microchip manufacturing, despite playing a relatively minimal role in the global market at present. The global demand for semiconductors is growing rapidly, as the deployment of renewable energy projects and the rollout of electric vehicles using the technology increases. The global semiconductor market size was valued at almost $611.4 billion in 2023 and is expected to grow to $2.06 trillion by 2032, at a CAGR of 14.9 percent from 2024 to 2032. At present, the Asia Pacific semiconductor industry holds a market share of just over 50 percent, with most manufacturing activities taking place in Taiwan, and dominated by the Taiwan Semiconductor Manufacturing Company TSMC. The East Asian country also produces around 90 percent of the world's super-advanced semiconductors. The next biggest microchip producers are South Korea, China, and the United States. Microchips are used for a wide range of applications, from artificial intelligence, military use, telecommunications, healthcare, and other key industries to helping cars, smartphones, and thermostats run. Yet most countries are heavily dependent on one region of the world for their supply of chips, which makes them extremely vulnerable to supply chain disruptions and geopolitical challenges. The 2020 COVID-19 pandemic made governments worldwide increasingly aware of the potential vulnerabilities of a global event, which has encouraged several major powers, such as the U.S., to begin to strengthen their regional supply chains and domestic manufacturing capabilities. The U.S. semiconductor market is expected to expand significantly in the coming years, thanks to favorable national policies, to around $258.3 billion by 2032. In 2022, the Biden administration signed the Creating Helpful Incentives to Produce Semiconductors CHIPS and Science Act, aimed at expanding the U.S. semiconductor manufacturing industry. CHIPS earmarked $70 billion for high-technology manufacturing, scientific research and development, and workforce development in the microchips industry. Since the passing of the CHIPS Act, private companies have announced almost $400 billion in funding for microchips and other electronics. This has been supported by the provision of a semiconductor investment tax credit that is available until 2027. Arizona is expected to become a hub for microchips manufacturing, alongside several other U.S. states. The government has provided $15 billion in investment to Intel and TSMC to build five new semiconductor fabrication plants in Arizona, which is expected to drive a further $100 of private investment. Sally Morton, a professor at Arizona State University, stated, “We are poised to really be the epicenter of chip manufacturing, but also research, development, and prototyping.” The U.S. used to be a major microchip production hub, manufacturing almost 40 percent of the world’s semiconductors in 1990. However, as many manufacturing operations were moved overseas to cut costs and China rose as a green energy and manufacturing power, this figure has fallen to just 12 percent. In addition, no advanced microchips are produced in the U.S. U.S. officials have suggested that new investments will put the country on track to manufacture around 20 percent of the world’s leading-edge logic chips by the end of the decade. These are the chips that are needed to power some of the most complex technologies, such as artificial intelligence. Based on this prediction, the role of the U.S. in microchip production will expand significantly. However, Asia will ultimately continue to dominate the global microchips market for decades to come. In addition to bolstering its manufacturing capacity, the U.S. is looking to strengthen its regional supply chains for key components, including microchips. Mexico is well-known for its manufacturing capabilities, often viewed as a low-cost, labor-intensive manufacturing hub. Mexico’s proximity to the U.S. also makes it extremely attractive for developing operations. This October, the Taiwanese firm Foxconn announced plans to open a plant for the mass production of Nvidia Blackwell superchips in Mexico. The facility is expected to be the largest in the world for bundling Nvidia's GB200 superchips, which are a vital component of Nvidia’s next-generation Blackwell family computing platform. The plant is expected to be constructed in Guadalajara. Foxconn already has a significant manufacturing presence in Mexico, having invested over $500 million in manufacturing operations in the state of Chihuahua in the north of the country. While Asia is expected to continue dominating the microchip production space for several decades, significant investment has been seen in the development of North America as a microchip manufacturing hub. Major investments in the U.S. and Mexico, supported by favorable government policies, are propelling the region in the field of microchip production and will support the development of an advanced chip manufacturing sector over the coming years. By Felicity Bradstock for Oilprice.com
Semiconductors Green Transition Supply Chains Manufacturing US Mexico CHIPS Act Artificial Intelligence Electric Vehicles
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Oasis presale tickets for North America Tour 2025 and how to register for ballotOasis will play five shows in North America in 2025 including dates at Rogers Stadium in Toronto, MetLife Stadium in East Rutherford and The Rose Bowl Stadium in Los Angeles
Read more »
When did Oasis last play in North America as band announce huge 2025 tour datesIt's been 16 long years for Oasis fans in North America
Read more »
When do Oasis North America 2025 dates go on sale?Oasis will play a series of North American dates next August and September in Toronto, Chicago, East Rutherford, Los Angeles and Mexico City
Read more »
Oasis North America dates 2025: What time do pre-sale tickets go on sale todayHere's everything you need to know ahead of today's pre-sale for tickets to the Oasis North American 2025 tour
Read more »
Oasis warn fans after thousands of fake tickets advertised for North America showsOasis have warned fans about thousands of fake tickets being advertised for their North America tour ahead of the official sale.
Read more »
The shale revolution helped make America’s economy greatBut will the country’s oil riches discourage a similar revolution in renewables?
Read more »