Since the onset of the US-China trade war, Washington has launched a series of initiatives to bring manufacturing back to India, especially the strategically significant semiconductors. Asian manufacturers, except for China, are also building manufacturing facilities and fabs in an era when globalization yields to diversified production.
According to Financial Times, in 2022, when the US government passed the Inflation Reduction Act (IRA) and the CHIPS Act, investments in semiconductor and clean tech in the US more than doubled than that in the previous year to US$200 billion, with projects worth more than US$1 billion rising multifold from four in 2019 to 31 after August 2022.
Financial Times quoted US energy secretary Jennifer Granholm saying that the tectonic plates are shifting with respect to investment in the United States.
According to fDi Intelligence, Merck and LGES announced investments in the US over the past week. Nikkei Asia reported that Panasonic was considering setting up its third battery manufacturing plant in the US.
Meanwhile, US commerce secretary Gina Raimondo told CNBC on April 14 that more than 200 companies from different sectors had expressed interest in applying for the CHIPS Act before clarifying that the firms in question had merely expressed their interest in applying, but haven't entered the application process.
The US official statistics show that companies outside of America had begun massive investments before the IRA and CHIPS Act were enacted. The US Bureau of Economic Analysis data shows that investments by Asia Pacific manufacturers rose by more than 100% annually in 2021 before slightly dropping by 3.46% in 2022.
Robert Casanova, director of Industry Statistics and Economic Policy at the Semiconductor Industry Association, said in an analysis that 52 semiconductor projects were announced across the US between May 2020, when the CHIPS Act was introduced, and March 2023, with combined investments announced of over US$210 billion. According to the analysis, 95% of the capital was poured into semiconductors manufacturing, and 4.6% of the projects were invested in materials manufacturing.
Sources of FDI in US (US$ million) | |||
Year | Canada | Europe | Asia Pacific |
2011 | 12,804 | 123,622 | 23,807 |
2012 | 11,933 | 120,117 | 22,259 |
2013 | 15,541 | 120,583 | 24,975 |
2014 | 15,032 | 122,792 | 29,800 |
2015 | 14,731 | 103,477 | 23,213 |
2016 | 13,955 | 100,359 | 19,427 |
2017 | 23,008 | 118,652 | 29,663 |
2018 | 27,300 | 132,961 | 34,928 |
2019 | 27,891 | 124,339 | 34,369 |
2020 | 19,254 | 96,170 | 28,169 |
2021 | 34,195 | 166,793 | 57,527 |
2022 | 37,853 | 150,911 | 55,536 |
Source: US Bureau of Economic Analysis, compiled by DIGITIMES Asia, April 2023
Semiconductor projects announced in US between 2020/5 and 2023/3 | ||
State | Projects | Investments (US$ mln) |
AZ | 14 | 61,686 |
CA | 1 | 350 |
CO | 2 | 1,480 |
CT | 1 | 200 |
DE | 1 | 50 |
FL | 1 | 37 |
GA | 1 | 600 |
ID | 1 | 15,000 |
IN | 4 | 2,070 |
KS | 3 | 3,704 |
MI | 2 | 675 |
NC | 1 | 5,000 |
NM | 1 | 3,500 |
NY | 4 | 21,458 |
OH | 3 | 20,070 |
OR | 4 | 2,216 |
PA | 1 | 300 |
SC | 1 | 443 |
TX | 5 | 60,900 |
UT | 1 | 11,000 |
Source: SIA, compiled by DIGITIMES Asia, April 2023
Semiconductor in vestment projects announced from May 2020 to March 2023 | ||
Category | Projects | Investments (US$ mln) |
Semiconductors | 27 | 200,728 |
Materials | 22 | 9,783 |
Equipment | 3 | 228 |
Source: SIA, compiled by DIGITIMES Asia, April 2023
