1. Executive Overview
Semiconductors form the backbone of the modern economy and underpin every central technology platform that drives national competitiveness. Specifically, the US semiconductor industry plays a crucial role in maintaining this economic strength. A single advanced chip can contain over one hundred billion transistors, supporting the computational density and energy efficiency required for artificial intelligence (AI), high-performance computing, advanced communications and critical defence systems [1]. Consequently, semiconductor capability is now inseparable from economic security, technological sovereignty and strategic influence. Furthermore, Figure 1 projected growth underscores why semiconductors are no longer a cyclical industrial sector, but a strategic foundation for financial competitiveness, digital infrastructure, and national security planning.
_Figure 1: Global semiconductor revenues are on track to approach US$1 trillion by 2030, driven by AI, data centre expansion, and advanced computing demand.
Source: Deloitte analysis based on World Semiconductor Trade Statistics (WSTS) [2]._
The United States remains the global leader in semiconductor design, architecture, IP development and electronic design automation [2]. However, the national share of global manufacturing has fallen sharply from 37% in 1990 to approximately 10% in 2022. As a result, this growing imbalance has created structural vulnerabilities for industries that rely on secure, high-performance chips [1].
The CHIPS and Science Act represents a landmark policy intervention aimed at rebuilding domestic capacity, strengthening supply chain resilience and accelerating research and workforce development [3]. Meanwhile, the global semiconductor landscape is undergoing rapid transformation. In addition, AI is driving unprecedented demand for silicon, while geopolitical tensions and regional industrial strategies are reshaping supply chains. This blog examines the strategic opportunities available to the United States and the risks that must be mitigated to secure long-term leadership..
2. The U.S. Role in the Global Semiconductor Ecosystem
Despite the decline in manufacturing share, the United States continues to lead in design, compute architecture, advanced IP and cloud-driven AI system requirements [1][2]. In fact, U.S. companies predominantly design the most advanced AI accelerators used in training large-scale models. At the same time, the country’s hyperscale cloud providers define the architectural standards that guide global compute development [2].
However, the most advanced chip manufacturing remains concentrated in East Asia. Therefore, this situation creates geopolitical and operational dependencies that directly affect sectors such as defence, aerospace, automotive and telecommunications. Accordingly, ensuring long-term resilience requires a combined strategy of domestic fabrication, friend-shoring with trusted partners and investment in emerging technologies that strengthen national autonomy.
3. Growth Opportunities for the United States
3.1 Rebuilding Domestic Manufacturing Capacity
The CHIPS for America programme is the most significant U.S. industrial investment in decades, mobilising federal incentives and private capital to restore manufacturing capability across the semiconductor value chain. Since the passage of the CHIPS and Science Act, companies across the U.S. semiconductor ecosystem have announced more than 140 projects in 28 states, representing over $630 billion in planned investment. Moreover, these projects will create and support more than 500,000 jobs, including 122,000 construction jobs and over 335,000 additional roles across materials, equipment, design and R&D [1]
These projects include:
- Leading-edge wafer fabrication facilities
- Advanced packaging and assembly centres
- New R&D hubs and university partnerships
- Workforce training pipelines
The U.S. Government Accountability Office emphasises that long-term competitiveness requires not only capital investment but also improvements in productivity, cost structure and supply chain integration [4]. In particular, secure domestic manufacturing is particularly critical for defence and aerospace applications where trust, provenance and supply assurance are essential.
_Figure 2: Geographic Distribution of U.S. Semiconductor Supply Chain Investments (2020–2025).
Source: Semiconductor Industry Association (SIA) [1]._
SIA data shows more than 140 semiconductor ecosystem projects across 28 U.S. states, representing over 630 billion dollars in announced investments since 2020 and supporting more than 500,000 direct and indirect jobs [1]. Figure 2 above shows that the geographic spread of these investments reflects a deliberate effort to rebuild manufacturing, materials, packaging, and R&D capacity across the whole semiconductor value chain, rather than concentrating capability in a small number of regional hubs.
3.2 AI, High Bandwidth Memory and Data Centre Expansion
AI has become the primary engine of semiconductor demand. Deloitte forecasts global semiconductor revenues to reach approximately US$697 billion in 2025, with generative AI, hyperscale data centres and high-performance networking driving the strongest growth [2]. AI workloads require extraordinary memory bandwidth, dense interconnects and advanced packaging architectures, increasing pressure on supply chains that are already concentrated in a few geographies.
U.S. companies design the majority of global AI accelerators and are central to developing the system architectures that define future hardware requirements [2]. However, the domestic ecosystem must scale advanced packaging, high-bandwidth memory integration, and interconnect innovation to remain competitive.
_Figure 3: Expected adoption of neural processing units (NPUs) in personal computing devices, indicating the expansion of AI workloads from data centres to the device edge.
Source: Deloitte analysis based on IDC Worldwide Quarterly Personal Computing Device Tracker. [2]_
Figure 3 shows that the integration of NPUs into mainstream PCs signals a structural shift in AI compute demand, extending semiconductor value creation beyond hyperscale data centres into consumer and enterprise edge devices, with implications for memory bandwidth, power efficiency, and packaging complexity.
Energy consumption has also become a strategic factor. Digital infrastructure is projected to double electricity usage by the middle of the decade, mainly driven by AI and high-density computing [8]. Sourceability highlights how digital twins are emerging as an essential tool for optimising energy use in data centres and semiconductor manufacturing, enabling firms to identify inefficiencies, optimise airflow, and reduce carbon impact at scale [8]. As sustainability becomes a competitive differentiator, efficient semiconductor design and operational optimisation will influence long-term industry leadership.
3.3 Workforce Development and Engineering Talent
Workforce capacity remains one of the most significant constraints on domestic manufacturing. The Semiconductor Industry Association reports tens of thousands of open roles across design engineering, fabrication, materials science and technician disciplines, with shortages expected to intensify as new facilities become operational [1]. This shortage is not unique to the United States; major semiconductor regions, including Europe and Taiwan, are also reporting comparable constraints.
The CHIPS Act funds the National Science Foundation to expand workforce development programmes, including semiconductor engineering curricula, apprenticeships, university research expansion and industry training partnerships [5]. The speed and scale of these programmes will directly impact whether the domestic ecosystem can operate at the required technical and production levels.
3.4 Advanced Packaging, Chiplets and Heterogeneous Integration
Performance improvements increasingly depend on system-level innovation rather than transistor scaling alone. Advanced packaging, chiplet architectures and heterogeneous integration are now essential for AI and high-performance computing. These technologies require precise thermal management, high-density interconnects and reliable cross-die communication.
The Universal Chiplet Interconnect Express (UCIe) standard supports an open ecosystem for multi-die systems, enabling modular architectures that combine components developed by different suppliers [6]. This approach reduces development cycles and enhances performance scalability. Strengthening U.S. capability in advanced packaging and chiplets is therefore critical for long-term competitiveness. Figure 4 illustrates how UCIe enables heterogeneous chiplet integration using standardised protocol bridges across PCIe and CXL, supporting scalable disaggregation while maintaining coherency, power management and system-level interoperability.
Figure 4: UCIe-based chiplet connectivity and protocol integration across PCIe and CXL interfaces.
Source: UCIe Consortium and ecosystem reference architectures
As chiplet-based systems scale in AI and high-performance computing, standardised interconnect frameworks such as UCIe are essential to reduce integration risk, enable multi-vendor ecosystems, and ensure that verification, coherency, and power management are handled at the system level rather than through bespoke point solutions.
4. Structural Risks and Strategic Challenges
4.1 Geographic Concentration and Critical Supply Chain Exposure
While the United States leads in design and architecture, manufacturing of leading-edge logic, high-bandwidth memory, lithography equipment and semiconductor materials remains heavily concentrated in a few locations abroad. The U.S. Government Accountability Office identifies these as systemic chokepoints that increase national vulnerability [4].
Sourceability reports additional risks emerging from the rapid expansion of memory production in China, which may affect global DRAM and NAND pricing, increase volatility and disrupt long-term planning for downstream industries [8]. These shifts highlight the strategic importance of diversification and risk-aware procurement.
4.2 Regulatory Complexity and Export Controls
The Bureau of Industry and Security administers export controls for advanced computing and semiconductor equipment. These regulations shape global trade flows, influence hardware design decisions, and directly affect competitiveness in markets such as AI accelerators, networking hardware and advanced servers [7].
Balancing national security objectives with commercial viability requires careful calibration. Excessively restrictive controls may reduce global market access for U.S. companies, while insufficient controls risk leakage of critical technologies.
4.3 Economic Viability and Cost Competitiveness
The cost of manufacturing semiconductors in the United States remains significantly higher than in leading Asian production hubs. Even with CHIPS Act incentives, long-term viability depends on lowering operational costs, improving productivity and integrating supply networks more efficiently [4]. Fluctuating tariff policy adds additional uncertainty, affecting supplier decisions, cost planning and downstream pricing [8].
4.4 Workforce Constraints and Execution Risk
The Congressional Research Service highlights workforce shortages as the most significant operational challenge for new U.S. fabrication projects [5]. CHIPS-funded facilities require thousands of highly specialised engineers and technicians. Without accelerated training pipelines and multi-layered workforce development, domestic production goals may not be achievable at the necessary scale.
5. Technology and Research Outlook
5.1 Strengthening U.S. Leadership in Lithography
Lithography capability underpins the entire semiconductor value chain. In December 2025, the Department of Commerce and NIST announced a preliminary intent to provide up to $150 million in CHIPS Act incentives to xLight, Inc., to develop a free-electron laser (FEL) light source for next-generation lithography [3]. Figure 5 highlights the fundamental physical and optical constraints that limit the scalability of current EUV lithography, underscoring why alternative light-source research, such as FEL-based approaches, is strategically significant for long-term U.S. competitiveness.
Figure 5: Conceptual architecture of a laser-produced plasma (LPP) EUV light source used in advanced semiconductor lithography. Source: ResearchGate, “Typical layout of an LPP EUV light source”.
The figure above illustrates tin droplet injection, laser-induced plasma generation, EUV photon collection via collector mirrors, and the delivery of EUV radiation to the scanner through an intermediate focus. These optical and physical constraints define throughput, yield, and scalability limits in current EUV lithography systems.
The FEL-based approach seeks to advance beyond current extreme ultraviolet (EUV) limitations, improving productivity, lowering cost and enabling sub-EUV manufacturing in the future. The project, located at the Albany Nanotech Complex, represents a strategic investment in foundational lithography capability and positions the United States to compete in areas traditionally dominated by other nations [3].
5.2 Verification, Chiplet Reliability and Trusted Systems
As chiplet architectures expand, verification complexity becomes a significant engineering challenge. Ensuring reliable operation requires comprehensive testing of interface protocols, coherence, thermal behaviour, security isolation and cross-die interoperability. U.S. leadership in EDA tools and verification methodologies provides a strategic advantage in enabling trustworthy, modular semiconductor systems.
6. Strategic Outlook
The evolution of global semiconductor supply chains suggests two plausible long-term scenarios:
Scenario A: Coordinated Domestic Expansion with Allied Support
The United States expands its manufacturing and packaging base, strengthens lithography and materials R&D, and deepens partnerships with trusted regions such as the European Union, Japan and South Korea. This scenario improves resilience and reduces exposure to single-point failures.
Scenario B: Fragmented Global Ecosystem
Industrial policy, export controls, and tariffs drive the separation of semiconductor ecosystems into parallel systems. Firms must build region-specific supply chains and support multiple product variants, which increases costs and reduces efficiency.
The most likely path combines elements of both scenarios. Robust domestic capability, empowered by CHIPS Act investments, must coexist with deeper cooperation among trusted partners to manage risks across memory, packaging, lithography, and materials.
7. Conclusion
The United States is positioned at a critical inflexion point for semiconductor leadership. Strong design capabilities, renewed manufacturing investment and expanding technological innovation create the potential for long-term competitiveness. However, success depends on sustained action across four dimensions:
- Innovation leadership in chip design, AI architectures, packaging and lithography.
- Workforce development to ensure engineering capacity to operate advanced facilities.
- Resilient supply chains, combining domestic capability with trusted global collaboration.
- Strategic investment, particularly in lithography, chiplets and AI system optimisation technologies.
- If executed effectively, this strategy will reinforce U.S. technological sovereignty and create a secure, scalable foundation for future innovation.
Speak with Our Semiconductor Strategy & Verification Experts
Alpinum Consulting supports organisations navigating semiconductor strategy, verification planning and supply-chain risk across global markets. For US-focused engagements, teams can access local expertise aligned with national policy, advanced manufacturing and system-level verification priorities through Alpinum United States.
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