As it turned out, money and desire alone are not enough for new chip factories to appear in the United States. An analysis of the situation showed that the system of obtaining permits for construction and work has turned into a swamp of bureaucracy. Bureaucratic laws slow down the process at three levels: federal, state and local. Urgent adjustments are needed, otherwise US factories will be delayed.
A report on the status of semiconductor plant construction in the United States was prepared by the Center for Security and Emerging Technologies (CSET) at the School of Foreign Service at Georgetown University. According to the center’s findings, the construction of semiconductor factories in the United States is one of the slowest in the world, which must be blamed on chaotic and complex regulatory policies in this area.
The report concluded that the “CHIP Act” alone is not enough to bring new chip factories to the country. For them to appear, and this to happen without significant delays, reforms are needed at all levels of government, without which the United States will not be able to catch up with China, Taiwan and even Europe.
CSET analysts studied the dynamics of manufacturing construction around the world between 1990 and 2020 and found that for approximately 635 factories built during this period, the average time between the start of construction and the start of production was 682 days. Three countries surpassed this figure: Taiwan (654 days on average), Korea (620 days) and Japan (584 days, a world record). Meanwhile, Europe and the Middle East were about the same at 690 days, and China at 701 days.
In the United States, this figure was 736 days, which is significantly higher than the global average and better only than the situation in Southeast Asia, where such work took 781 days. But this is if you look at all the years, including the best of them – the 90s and early 2000s. At that time, semiconductor factories in the United States were built in an average of 675 days. However, already in the 2010s, construction and commissioning times increased sharply to 918 days, and now things are hardly any better. In Taiwan and China, on the contrary, in the 2010s, construction times accelerated to 642 and 675 days, respectively.
Also in the United States, the number of constructions of such facilities has decreased. In the 90s, 55 factories were built in the country, in the 2000s – 43, in the 2010s – 22. At the same time, China significantly increased the construction of new factories: from 14 in the 90s to 75 in the 2000s and to 95 in the 2010s. While China is still playing catch-up in semiconductor technology, it has certainly become a giant in chip manufacturing. At least from the point of view of deploying production capacities.
CSET’s findings should not surprise us. The construction of all new factories in the United States has long gone beyond the initially approved plans. This includes the TSMC Fab 21 plant in Arizona, Intel’s production in Ohio, which is now expected to start no earlier than 2026, and the postponement of construction of the Samsung plant in Texas to 2025.
According to the report, a vital issue for building semiconductor factories in the US is regulation. It is now “beneficial to the general public, but poses trade-offs for semiconductor manufacturers.” Moreover, analysts have described legislation in this area as “arcane”. The study does not recommend deregulation entirely, but instead suggests removing redundant regulations and making exceptions for the semiconductor industry.
This should be done at all levels, from federal to local, and also pay attention to individual regulators, for example, environmental protection organizations, who have their own procedures and views on everything related to the construction and operation of production facilities. If this is not done, the center’s experts conclude, the United States will never catch up with other countries in this matter, including China.
If you notice an error, select it with the mouse and press CTRL+ENTER.