US Semiconductor Industry Leads Global FDI with Over $100bn

The semiconductor industry in the United States has emerged as the global leader in foreign direct investment (FDI), attracting over $100 billion since 2019, according to research by GlobalData. Key players such as TSMC, Infineon, Bosch, and ASML have been prominent investors in the US semiconductor sector.

GlobalData’s 2024 thematic intelligence report on next-generation chips revealed that TSMC, a leading semiconductor manufacturer, plans to increase its investment in the US from $45 billion to $65 billion by 2030. This significant boost in investment is largely attributed to the US government’s $6.6 billion CHIPS Act subsidy, aimed at revitalising the domestic semiconductor industry.

Despite recent challenges, including a skills shortage and construction delays for TSMC’s Arizona plant, the company remains committed to its US expansion plans. Following a substantial payment in April 2024, TSMC has announced plans to build a third plant in Arizona, signalling a strengthening of its relationship with the US chip industry.

However, constructing chip plants in the US presents significant cost challenges compared to Asia, both in terms of labour and materials. GlobalData’s report emphasises the importance of ongoing financial support from the US government to ensure the continued growth of local chip production.

Meanwhile, Germany has emerged as the second-largest recipient of global FDI in semiconductors, attracting nearly $40 million since 2019. With a 69% increase in FDI from 2022, Germany is solidifying its position as Europe’s chip hub. Notably, TSMC has announced plans to construct a $3.8 billion chip plant in Dresden, contributing to Europe’s efforts to enhance its chip self-sufficiency.

Despite Europe’s relatively small share of global chip manufacturing, GlobalData predicts a strategic focus on improving chip self-sufficiency, potentially positioning the continent as a subsidiary production hub for either the US or China, depending on geopolitical dynamics.