The US is spending billions to boost chip manufacturing. Will it be enough?

CNN — The United States government is pulling out all the stops to boost domestic semiconductor manufacturing, injecting billions of dollars into the beleaguered sector and flexing all policy muscles available to give it a leg up over competition from Asia. US-based fabs, or chip manufacturing plants, currently only account for 12% of the world’s modern semiconductor manufacturing capacity, according to data from the Semiconductor Industry Association trade group. While only “about 10% to 14% of chips sold come from US manufacturing facilities,” according to Columbia Business School professor Dan Wang, the United States does have other strengths. Wang said he thinks that might be why you see the U.S. “axe-throwing so much money at companies to set up plants in the United States.” It’s not just to respond to demand and become more self-reliant, “but also because you need to get these things up and running very, very quickly, in order to even be in the race at all.” What it takes to build up a domestic chip industry Building new chip fabs itself is a costly and time-consuming endeavor. “A modern fab is something like half a million square feet,” said Bob Johnson, an analyst at Gartner, and requires “monstrous clean rooms that have massive air handling capabilities.” He added that these massive buildings require “exceptionally strong foundations.” As he put it, “you cannot have any vibration in the fab because it can wreck the manufacturing process.” In addition, a single extreme ultraviolet lithography machine, required to map out the circuitry of chips, costs about $150 million, and Reuters reports “a cutting-edge chip plant needs 9-18 of these machines.” Moreover, the manufacturing of semiconductors requires a range of specialized inputs, including pure chemicals such as fluorinated polyimide, and etching gas, chip etching machines, and more.