Over the past three decades, U.S. semiconductor manufacturing has declined sharply as production shifted overseas to regions offering lower costs and aggressive government incentives. In 1990, the U.S. produced about 37% of the world’s semiconductors; today, that share has fallen to roughly 12%. This decline was driven by offshoring of fabrication facilities to Asia – particularly Taiwan, South Korea, and China – where companies have built advanced manufacturing capacity. Meanwhile, U.S. investment focused more on research, design, and innovation, leaving the critical fabrication stage vulnerable to foreign dependence. The resulting imbalance exposed national security risks and supply chain fragility, especially during the global chip shortages of the early 2020s.

Realizing these risks, the U.S. government enacted the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act in 2022 – an initiative aimed at revitalizing domestic semiconductor manufacturing and reducing reliance on foreign supply chains. It allocated more than $52 billion in federal funding to boost chip production, research, and workforce development.

The CHIPS Act aims to bolster national security, drive technological innovation, and build a reliable, resilient semiconductor supply chain within the U.S. By funding new fabrication facilities and cutting-edge research centers, it strives to restore U.S. leadership in this vital technology field. The Act also encourages close collaboration among government, industry, and academia to advance progress in semiconductor design, materials science, and packaging technologies.

Read more about the CHIPS act in the eBook How the CHIPS Act is Redefining PLM. 

The staggering impact of the CHIPS Act

Three years after the CHIPS and Science Act was enacted, the U.S. has seen a surge of major investments in semiconductor manufacturing and the supporting technology infrastructure. Leading companies such as Intel, TSMC, Samsung, Micron, and GlobalFoundries have committed hundreds of billions of dollars to build or expand advanced fabrication plants across Arizona, Texas, Ohio, New York and other locations.

Examples of these investments include:

  • Intel received $7.86B supporting their own $100 billion investment plan to expand American semiconductor manufacturing and technology leadership with projects located in Arizona, New Mexico Ohio and Oregon.
  • GlobalFoundries was awarded $5 billion in funding for commercial fabrication facilities in New York and Vermont.
  • Samsung will use their award of $4.745 billion as part of its planned $37 billion investment in Texas chip facilities that include two new “leading-edge logic fabs and an R&D fab” in Taylor, Texas, and the expansion of its plant in Austin.
  • Texas Instruments received roughly $1.6 billion in funding toward the construction of three new facilities. TI has pledged more than $18 billion through 2029 to the projects, which are expected to create 2,000 manufacturing jobs.
  • TSMC committed to build its most advanced chips in Arizona after receiving a pledge of $11.6B from the CHIPS Act. Their plan is to start producing the 2-nanometer chips at a new factory in Phoenix by 2028.
  • Amkor was awarded $407M to build a major advanced packaging and test facility in Peoria, Arizona.

It is hard to ignore the geographical impact of the increased capital spending. The western part of the U.S. has seen a boom in construction and infrastructure production because of the new investments.  According to DigiTimes, Arizona has emerged as a new semiconductor hub, noting that despite early skepticism about ramping up new production sites on schedule, TSMC’s first 4nm fab began mass production at the end of 2024, while Intel’s Fab 52 and Fab 62 have also started production.

Overall, Arizona has secured more than 40 semiconductor expansions, representing over $102 billion in capital investment and creating more than 15,700 direct industry jobs. These projects span the entire ecosystem – from including manufacturing, advanced packaging to research and development, equipment, supply chain, and workforce development.

Semiconductors move west

There is no better indication of the growing size, importance, and momentum of the semiconductor industry in the US than looking at the SEMICON West 2025 Conference, held this year in Phoenix.  That’s right – the massive conference that has traditionally resided in San Francisco for the past 35 years, took the bold step to start alternating the show between San Francisco and Phoenix.

Aras was an exhibitor for the event, and I was privileged to attend. My simple reaction is that the event was overwhelming.  It was reported that there were between 35,000 and 40,000 attendees and roughly 1,533 booths – a 45% increase over last year. The event included courses and presentations covering a range of subjects crucial for the semiconductor industry. This included topics on advanced manufacturing, advanced packaging, advanced substrates, cybersecurity, design, sustainability, flexible hybrid electronics, global standards, materials, market trends, MEMs and sensors, networking, photonics, smart data and AI, supply chain, and workforce development.

The sheer number of manufacturers and vendors represented at the SEMICON West conference underscored the complexity and vitality of the semiconductor industry – especially in Arizona. Companies showcased their own specialized technologies, materials, products and processes, reflecting the many disciplines required to operate in the industry. From equipment suppliers to software developers, the diversity of participants highlighted the intricate web of interdependencies that drive innovation in the field.

This diversity also makes collaboration among vendors not merely beneficial but essential. No individual company can manage the combined challenges of cost, scale, and performance on its own, particularly as organizations work to meet the complex requirements associated with CHIPS Act funding. To qualify for and fully leverage these investments, companies must coordinate efforts across the entire supply chain, encompassing materials, manufacturing, and design. Such collaboration is equally vital for meeting rigorous regulatory and compliance standards that demand transparency, security, and accountability at every step.

Connecting capabilities across the semiconductor value chain

After attending numerous presentations and engaging in many discussions with various vendors, I walked away with a clear message: to remain competitive and accelerate innovation, organizations across the semiconductor industry – and its broader partner ecosystem – must urgently strengthen their systems’ ability to connect both people and data.

As companies discussed technical breakthroughs supporting new use cases for their  , predictive analytics,  , improved simulations, supply chain optimization and many other strategies, the commonality across these efforts is connecting the vast web of collaborators from different companies, functions, and locations. The growing landscape of contributors to the process requires collaboration hubs that adapt to new organization paradigms and scale quickly ensuring the proper information is being shared with a growing network of people when they need it while protecting against malicious actors.

Beyond connecting people, almost every discussion and presentation had a focus on connecting diverse information. Just as a collaboration hub connects people, these new strategies deeply depend on connecting data across diverse systems, locations, functions, and organizations enabling unprecedented levels of digital traceability and accessibility.

The semiconductor industry’s challenge of extreme precision is driving the demand for exceptionally accurate and comprehensive data to  , analytics, digital twins, and other functions. Without this level of data quality, AI-driven strategies risk losing effectiveness and delivering suboptimal results. Complete and correct digital threads are the linchpin for just about every new strategy taking shape, especially as new compliance and regulations are emerging.

Pulling it all together

PLM systems have long been the centralized location for companies to establish their as they connect product data, processes, and stakeholders across the entire lifecycle, from design to manufacturing and service. By creating a single source of truth, they enable real-time collaboration, ensure traceability, and strengthen data integrity across the enterprise. The best of these solutions are designed with the understanding that the data itself does not all need to be in the same location – it simply needs to be connected. These also provide the flexibility for companies to implement their own specific business processes and logic, ensuring the quality and scalability of the information.

 Aras Innovator empowers semiconductor companies to manage complex supplier networks through a unified digital thread that connects every stage of product development. By providing a centralized platform for data sharing,  , and collaboration, Aras ensures that suppliers and OEMs work from the same source of truth. This transparency reduces design errors, shortens development cycles, and enhances traceability across materials, manufacturing, and compliance processes. The solution also enables secure access controls, allowing external partners to collaborate safely on sensitive design and production data. With built-in workflows and  , suppliers can stay aligned with evolving product requirements and regulatory standards.

This is what Aras calls the Aras Effect. Legacy PLM systems are too rigid and fragmented to keep up. Aras Innovator gives organizations the ability to truly own their digital thread – connecting design, manufacturing, quality, and supply chain into a single backbone. It is built on five principles: connection, adaptability, openness, scalability, and community. Together, they provide the tools to innovate faster, collaborate more effectively, and adapt with confidence as demands change.

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