Washington’s Push to Onshore Semiconductor Production: Securing Half of Chips Domestically

The U.S. government is intensifying efforts to bring semiconductor production back to America. Washington is pushing for half of the country’s semiconductor needs to be met by domestic production, aiming to reduce its reliance on overseas suppliers, particularly in light of geopolitical concerns and potential threats to Taiwan. U.S. Commerce Secretary Howard Lutnick confirmed discussions with Taipei to mitigate risks of over-reliance on a single region for advanced chip manufacturing. As part of this initiative, Taiwan Semiconductor Manufacturing Company (TSMC), a major supplier to companies like Apple, Nvidia, and AMD, has been expanding its operations in the U.S. TSMC’s Arizona plant began mass production of 4-nanometer chips in late 2023 and is preparing to ramp up production of 3-nm chips. The company is investing $165 billion to build more U.S. facilities and aims to produce 2-nm chips by 2028. The U.S. sees this as a critical strategy to safeguard national security and reduce vulnerabilities exposed during the COVID-era chip shortages. However, the shift to domestic production will require a massive investment in infrastructure and the relocation of TSMC’s extensive supply chain.