The U.S. semiconductor supply chain’s resilience will meaningfully increase only if current efforts to re-shore fabrication (that is, to situate more facilities that make its key parts in the United States) are met with commensurate efforts to re-shore upstream material production along with downstream assembly, test, and packaging (ATP) of finished microelectronics.

In this condensed version of his June 2022 report, written for Semiconductor Digest, John VerWey outlines how targeted investment incentives to increase U.S.-based advanced packaging capacity are also important for increasing semiconductor supply chain resilience.

The semiconductor industry and the U.S. government are engaged in ambitious plans to expand domestic semiconductor manufacturing capacity. Previous CSET research has found that the CHIPS for America Act incentives, if carefully targeted and augmented by adequate regulatory and workforce support, could reverse the observable decline in U.S. semiconductor manufacturing capacity since 1990. This paper argues that targeted investment incentives to increase U.S.-based advanced packaging capacity are also important for innovation, supply chain security, and ongoing semiconductor industry leadership.

Congress has advanced legislation to appropriate $52 billion in funding for the CHIPS for America Act, which aims to increase semiconductor manufacturing and supply chain resilience in the United States. But more can be done to improve the resiliency of U.S. access to microelectronics beyond manufacturing incentives. This report outlines infrastructure investments and regulatory reforms that could make the United States a more attractive place to build new chipmaking capacity and ensure continued U.S. access to key inputs for semiconductor manufacturing.