The US, where semiconductors were invented, was producing 37% of the world's supply of chips as recently as the 1990s. But only about 12% of all computer chips are produced domestically now. 

That decline in domestic chip production was exposed by the worldwide supply chain crisis, and that has led to calls for reshoring microprocessor manufacturing in the US. With the federal government spurring them on, the likes of Intel, Samsung, and TSMC have unveiled plans for a flurry of new US fabrication plants. (Qualcomm, in partnership with GlobalFoundries, also said it would invest $4.2 billion to double chip production in its Malta, New York fabrication facility.)

Just last week, chipmaker Micron Technology announced it will spend$20 billion to build what it called the largest-ever US semiconductor factory ever, and may spend up to$100 billion over 20 years to expand it.

In announcing the new fabrication plant projects, the semiconductor manufacturers, at least in part, credited the CHIPS and Science Act of 2022 signed into law by President Joe Biden in August. The legislation provides$52.7 billion for manufacturing incentives to boost microchip production in the US. Chip manufacturers can begin seeking to use tax breaks and funds to offset construction and other costs beginning next year.

Essentially, the CHIPS Act is an attempt to increase the percentage of microprocessors produced in the US by closing the cost differential with other countries such as Taiwan, South Korea, and China. In those nations, the governments are already subsidizing semiconductor manufacturers.

GlobalFoundaries' Malta, New York headquarters and foundry. The company announced this year it would be investing$4.2 billion to double its US chip production. 

The US legislation is also meant to produce high-tech jobs and loosen the supply-chain grip foreign chip manufacturers have on US OEMs.

"The bottom line is that without the CHIPS and Science legislation, Micron would have decided to build its mega-fab overseas," Senate Majority Leader Chuck Schumer (D-NY) said in a statement.

Gaurav Gupta, Gartner's vice president for Emerging Technologies and Trends, said the money, tax breaks, and other incentives in the CHIPS Act is pocket change for leading manufacturers. "If you look at the leading chipmakers, like TSMC, Samsung and Intel, they're spending that much money in one year," Gupta said.

What the incentives do, however, is demonstrate that the US government is serious about supporting the industry. But more is needed, according to Gupta, who cited the need for a CHIPS Act 2.0, 3.0, and beyond.

"This is the first time this money has been made available," he said. "And, as a result, you're seeing a lot of chipmakers announcing new fabs and capacity expansions. Let's see how well they execute. We'll know by the 2023