The CHIPS Act Spurs Semiconductor Site Selection Projects in the U.S.

by King White, on Aug 12, 2022 2:11:32 PM

The U.S. semiconductor industry is poised to go through significant expansion with the passage of the Chips and Science Act of 2022. The economic development impact on communities around the U.S. could be substantial as semiconductor manufacturers and their suppliers expand their U.S. production footprint. There will be significant direct and indirect job creation and revenue generated from utilities and taxes. It is critical that semiconductor manufacturers and their suppliers carefully navigate the country to find the optimal locations to expand based on factors including workforce, infrastructure, economic incentives, and qualified land sites.

Supply chain challenges fuel expansion into the U.S.

The global chip shortage amid the COVID-19 pandemic and political tensions with foreign countries have hard hit industries of all types. The shortage has made companies in the U.S. rethink their dependence on foreign chip production. Considering the United States’ global share of semiconductors produced domestically has declined from 37% in 1990 to 12% today, it is evident that something needs to change if companies want to avoid future disruptions. The passage of the Chips Act appears to be the fuel needed to help drive the growth of semiconductor manufacturing in the U.S.

Only a portion of the Chips Act is focused on increasing manufacturing

There are various buckets where the $280 billion provided through the act would go. The $52 billion allotted to increase semiconductor manufacturing in the U.S. will have the greatest impact on site selection activity. This provision provides manufacturing and research grants to the semiconductor industry to develop new or expand existing plants, dedicates funding for R&D and workforce development programs, and creates a 25% investment tax credit for chipmakers. The remaining funds will go to the National Science Foundation (NSF), the National Institute of Standards and Technology (NIST), the Department of Commerce, and the Department of Energy.

Finding quality sites with infrastructure and workforce will not be easy

There is already a shortage of quality industrial land sites available in the U.S. due to the last few years of historic growth in the industrial sector. The demand for mega sites has been at an all-time high. The semiconductor sector is coming late to the game in the search for qualified mega sites, so companies with existing chip plants capable of expanding their sites will have the advantage in speed to market. These plants need a significant amount of power and water not to mention a qualified workforce which can limit the feasible options quickly. Considering it takes an estimated three to five years to get a new plant operational, it is critical to select the optimal site through a proven site selection process to achieve long-term operational success.

Recent semiconductor plant site selection activity

As Site Selection Group identified in February’s blog Semiconductor Site Selection Activity on the Rise in the U.S., site selection activity was increasing prior to the passage of the act with the next wave about to occur. Some of the recent announcements include the following:

CHIPS Act-Site Selection Activity Map

  • Intel has chosen 1,000 acres near Columbus, Ohio, to build a $20 billion semiconductor plant that will employ 3,000 workers. The project will initially have two chip factories that should be operational in 2025. It is the largest single private-sector investment in Ohio's history.
  • Samsung Electronics plans to invest $17 billion to establish a new chipmaking plant in Taylor, Texas, near Austin. The facility will produce advanced logic chips for next-generation devices. More than 2,000 new semiconductor jobs and 6,500 construction jobs will be created. An economic incentive package of an estimated $677 million will be provided to Samsung.
  • On the heels of the Taylor announcement, Samsung Electronics also announced potentially 11 new chipmaking facilities in the Austin area over the next two decades with nearly $200 billion in capital investment and the creation of more than 10,000 jobs according to documents filed with the state of Texas.
  • Texas Instruments has announced it will spend $30 billion to establish a new semiconductor manufacturing facility in Sherman, Texas, north of Dallas. Production from the first facility could start as early as 2025. With the option to include up to four fabs, the company will create up to 3,000 new jobs. The company accepted a $148 million economic incentive package.
  • GlobiTech also announced a new semiconductor facility in Sherman that is expected to create 1,500 jobs. The company was awarded a $15 million economic incentive grant from the Texas Enterprise Fund.
  • The Taiwan Semiconductor Manufacturing Company will build a new plant in Phoenix for $12 billion. The company will begin making 5-nanometer chips in 2024. Future production plans call for 20,000 wafers a month.


The shifting supply chain of the semiconductor industry has created significant challenges for chipmakers trying to find the optimal location with the right balance of workforce, utilities, infrastructure, economic incentives, and land sites. As a result, it is critical to engage a site selection and economic incentive expert to identify and evaluate the available options.

Topics:ManufacturingEconomic IncentivesSite SelectionSupply ChainTechnologySemiconductor



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