US Expected to Lead Global Advanced Chip Production by 2032: SIA Report

Chip war: world is moving fast, so much so that in a short period, semiconductor chips have replaced data as new oil. A recent study by US Semiconductor Industry Association (SIA) has forecasted a significant shift in global vanced chip manufacturing by 2032. According to report titled "Emerging Resilience in Semiconductor Supply Chain," United States is projected to produce a staggering 28 per cent of world's most vanced processors, while China's share is expected to be a mere two per cent. vanced chip means chips below 10 nanometers. 

study primarily focuses on anticipated impact of CHIPS Act funding and China's efforts to achieve processor independence. With billions in subsidies from CHIPS Act, US semiconductor industry is expected to experience substantial growth, reducing its reliance on foreign suppliers and bolstering domestic output.

In 2022, majority of vanced chips were manufactured in Taiwan and South Korea, accounting for 69 per cent and 31 per cent of sub-10nm dies, respectively. However, by 2032, SIA predicts a significant shift, with US's share projected to rise to 28 per cent In contrast, China's share is expected to be minimal, with Europe and Japan projected to account for six and five per cent, respectively. Taiwan's share is expected to decline to 47 per cent.

While China is predicted to increase its market share for 10nm to 22nm chips, along with a slight bump in legacy silicon production, substantial decreases in DRAM and NAND fabrication will le to an overall decline in China's semiconductor industry share. In contrast, US is expected to rise from 10 per cent to 14 per cent of global semiconductor industry share by 2032.

It's important to note that while cutting-edge chips may not be required for most applications currently, rapid pace of technological vancement suggests that demand for sub-10nm processors may increase significantly by 2032, driving furr growth and innovation in semiconductor industry.

Pumping in Investments

In response, governments and companies worldwide are doubling down on efforts to enhance resilience. Initiatives like US CHIPS Act, which injects $52 billion in grant incentives and offers a 25 per cent investment tax credit for semiconductor manufacturing, are gaining momentum. Similarly, European Chips Act and initiatives in Mainland China, Taiwan, South Korea, Japan, and India highlight global commitment to bolstering semiconductor production.

Private sector investment in wafer fabrication is also on rise, projected to reach a staggering $2.3 trillion in 2024–2032. This significant influx of capital is expected to drive diversification in wafer fabrication capacity, with United States emerging as a key player. By 2032, US is poised to increase its fab capacity by a whopping 203 per cent, reversing a deces-long downward trajectory and capturing a 14 per cent share of global aggregate fab capacity.

resilience drive extends beyond wafer fabrication to assembly, test, and packaging (ATP) activities. Initiatives aimed at expanding ATP activity in Souast Asia, Latin America, and Eastern Europe are gaining traction, supported by government funding and foreign investments. ditionally, development of vanced packaging technologies is driving ATP capacity expansion in US and Europe, furr bolstering resilience in semiconductor supply chain.