U.S. Reshoring: Semiconductor Supply Chain & Fabs

The United States is actively investing in reshoring semiconductor production to reduce dependence on overseas fabs and strengthen national security. Through the CHIPS and Science Act and state-level incentives, multiple regions are positioning themselves as semiconductor hubs. Each state offers unique advantages — from existing fab ecosystems and workforce pipelines to access to energy and materials. Together, these initiatives aim to create an end-to-end domestic supply chain spanning raw materials, wafer fabs, packaging, and advanced R&D.

Why Texas Leads U.S. Semiconductor Reshoring

Texas AI Superclusters: Stargate & Fermi America

Texas vs. Other Reshoring States

Other Key Reshoring States

Reshoring Bottlenecks & Challenges

While major federal and state investments are accelerating U.S. reshoring, several structural bottlenecks threaten to slow progress. Building fabs alone is insufficient — the full end-to-end ecosystem must be present and scaled. The following challenges highlight where additional policy, investment, and workforce alignment are needed.

• Advanced Packaging (OSAT): The U.S. has minimal high-volume OSAT (outsourced assembly and test) capacity compared to Taiwan (ASE) and Singapore (Amkor). Without local packaging, wafers must still be exported for assembly.
• Process Gases & Chemicals: Ultra-pure gases (e.g., neon, helium, argon) and wet chemicals (HF, HCl, H2SO4) are still largely imported. Domestic refining and purification capacity remains limited.
• Critical Materials: Rare earths, gallium, and germanium are heavily controlled by China. Quartzite ? polysilicon refining is dominated by overseas suppliers, leaving upstream vulnerabilities.
• Workforce Shortages: Even with new university and community college programs, the U.S. lacks tens of thousands of semiconductor engineers, technicians, and maintenance specialists.
• Tooling Supply Chain: Photolithography (ASML), etch and deposition tools (Tokyo Electron, Lam Research), and metrology remain globalized. Some U.S. firms are leaders, but EU and Japan dominate key steps.
• Water & Power Infrastructure: Advanced fabs require 20M+ gallons of ultrapure water per day and hundreds of MW of continuous, clean power. Few U.S. sites currently meet this without major infrastructure upgrades.
• Cost Competitiveness: Even with subsidies, building and operating U.S. fabs costs 30–50% more than in Asia. Sustained incentives and ecosystem clustering are required to offset this gap.

Strategic Outlook

• CHIPS Act Alignment: Federal subsidies are designed to de-risk early stages but must be paired with long-term ecosystem growth.
• State Collaboration: Texas, Arizona, and New York are exploring regional clusters to balance resources and avoid duplication.
• Cross-Sector Leverage: Synergies with EV gigafactories and AI datacenters can strengthen energy, workforce, and infrastructure sharing.
• National Security Lens: Policymakers increasingly frame bottlenecks as strategic vulnerabilities on par with oil dependence in earlier decades.

Strategic Considerations

• End-to-End Supply Chain: Reshoring requires not only fabs but also domestic sources of critical materials, gases, and packaging capacity.
• Energy & Water: Fabs demand 100–1000 MW of power and millions of gallons/day of ultrapure water, driving state-level infrastructure investments.
• Workforce: Universities and technical colleges in Texas, Arizona, and New York are expanding semiconductor-specific programs.
• National Security: Domestic fabs are considered strategic assets underpinning the AI, defense, automotive, and energy industries.
• CHIPS Act & State Incentives: Federal grants are being matched with multi-billion-dollar state packages to attract megafab projects.

Representative Timeline