US semiconductor manufacturing is poised for significant transformations as major chipmakers prepare to bring new factories online during Donald Trump’s upcoming presidential term.

While the Biden administration paved the way for domestic chip production through the CHIPS Act, the exact magnitude of increased manufacturing and job creation could have occurred during Trump’s presidency had the necessary groundwork been laid then.

Biden’s initiative marked a pivotal moment, as he secured binding commitments from five leading international semiconductor manufacturers – Taiwan Semiconductor Manufacturing Company (TSMC), Samsung, Micron, and South Korea’s SK Hynix – to bolster the United States’ semiconductor production capabilities in a groundbreaking development. By August 2024, the semiconductor industry has witnessed a surge of over 90 new manufacturing projects across 28 US states, resulting in nearly $450 billion in invested capital.

The strategic timing of this manufacturing expansion is crucial for cloud computing providers. According to SIA’s report, by 2032, the United States is expected to more than triple its semiconductor manufacturing capacity, a growth rate unmatched globally over this decade-long period. 

By 2032, the US is expected to account for 28% of global capacity in advanced chips with feature sizes below 10nm, while securing 28% of international capital expenditures between 2024 and 2032.

As the cloud computing industry grapples with severe chip shortages and supply chain disruptions, this expansion of US semiconductor manufacturing capacity offers several strategically significant advantages.

• Establishing in-house chip manufacturing capabilities for cloud providers enables them to better manage supply chain risks. According to the SIA report, US fabrication capacity is poised to increase by a significant 203 percent between 2022 and 2032, which may lead to reduced reliance on global suppliers.
• New services focus on developing advanced logic and memory chips, crucial components for the infrastructure of future cloud computing. The CHIPS Act’s $39 billion in manufacturing incentives is designed to foster the development of cutting-edge manufacturing capabilities.
• The semiconductor industry’s anticipated growth of 42,000 direct jobs and 101,500 indirect jobs may have far-reaching implications for technological advancements in the cloud computing sector. The industry’s significance extends far beyond its own borders, with the semiconductor trade having a profound impact on more than 300 downstream economic sectors, supporting in excess of 26 million American workers.

Nevertheless, challenges stay. According to a recent report by the Semiconductor Industry Association, a significant talent gap is anticipated in the semiconductor industry, with a projected shortage of approximately 67,000 technicians, PC scientists, and engineers by 2030. Samsung is said to have put off receiving chip manufacturing equipment due to a lack of substantial orders, while other firms are struggling with prolonged construction schedules.

The successful implementation of a home semiconductor manufacturing initiative for cloud service providers and their clients could lead to more reliable hardware supply chains, reduced costs resulting from decreased global transportation and tariffs, and expedited access to cutting-edge chip technology. Despite the extended timeframe for completing the new manufacturing facility, it may take several years for the benefits to become apparent.

According to the SIA report, artificial intelligence is expected to be a significant catalyst for semiconductor demand, with potential contributions exceeding $15 trillion to the global economy by 2030. As cloud suppliers increasingly focus on AI providers and infrastructure, this development aligns seamlessly.

As the cloud computing landscape continues to advance and diversify, securing robust US-based semiconductor production capacities is crucial for maintaining technological superiority and guaranteeing dependable service delivery. 

As the Trump administration comes to a close, the coming years will test whether the promised manufacturing surge can deliver on its promises and, in turn, reshape the landscape of cloud computing infrastructure.