SIA Report Highlights Strategies for Strengthening Supply Chains Supporting the U.S. Chip ...

The semiconductor industry is making generational investments in U.S. capacity across the chip value chain. A new SIA report, titled “ Understanding Dependencies in the U.S. Semiconductor Supply Chain ,” details how the upstream supply chains supporting America’s semiconductor ecosystem are increasingly vulnerable to disruptions. To maintain and build on U.S. semiconductor leadership, government and industry must pursue a comprehensive set of supply and demand focused actions to reduce strategic dependencies and build trusted supply chains with likeminded partners and allies.

A resilient supply chain strategy for the U.S. semiconductor ecosystem requires a combination of mitigation approaches and policy responses, starting with:

Investing in domestic capacity and building strategic inventories for priority materials and equipment, where feasible. Incentives : Last year, the National Institute of Standards and Technology’s (NIST) CHIPS Program Office reopened a funding opportunity for projects to build, expand, or modernize facilities to produce semiconductor materials and manufacturing equipment. NIST should move quickly to fund priority projects, particularly as China doubles down on new domestic capacities for chip materials and equipment. Clusters : State and local governments should create special economic zones and science & technology parks to incentivize suppliers to concentrate near semiconductor manufacturing and R&D hubs. Hsinchu Science Park in Taiwan is an exemplar, deliberately developed to connect semiconductor manufacturing, R&D, universities, suppliers, and skilled workers in one geographic ecosystem with mechanisms for turning publicly supported research into commercial companies. Albany NanoTech in New York uses a similar model to bring government, universities, equipment manufacturers, and chipmakers together in support of advanced semiconductor research. Stockpiling : In 2025, the White House and Export-Import Bank of the United States (EXIM) launched Project Vault , a public-private U.S. Strategic Critical Minerals Reserve, backed by a $10 billion government loan and ~$2 billion in private-sector investment. EXIM should prioritize minerals essential for semiconductor production and assist chip manufacturers to expand their own stockpiles.

Incentives : Last year, the National Institute of Standards and Technology’s (NIST) CHIPS Program Office reopened a funding opportunity for projects to build, expand, or modernize facilities to produce semiconductor materials and manufacturing equipment. NIST should move quickly to fund priority projects, particularly as China doubles down on new domestic capacities for chip materials and equipment.

Clusters : State and local governments should create special economic zones and science & technology parks to incentivize suppliers to concentrate near semiconductor manufacturing and R&D hubs. Hsinchu Science Park in Taiwan is an exemplar, deliberately developed to connect semiconductor manufacturing, R&D, universities, suppliers, and skilled workers in one geographic ecosystem with mechanisms for turning publicly supported research into commercial companies. Albany NanoTech in New York uses a similar model to bring government, universities, equipment manufacturers, and chipmakers together in support of advanced semiconductor research.

Stockpiling : In 2025, the White House and Export-Import Bank of the United States (EXIM) launched Project Vault , a public-private U.S. Strategic Critical Minerals Reserve, backed by a $10 billion government loan and ~$2 billion in private-sector investment. EXIM should prioritize minerals essential for semiconductor production and assist chip manufacturers to expand their own stockpiles.

Protecting and expanding trusted allied supply. Ensure cost-competitive access to inputs from partners : The U.S. chip ecosystem relies on imports of specialized inputs – including extreme-ultraviolet lithography machines, advanced materials, chemicals, and highly engineered components – not readily substitutable or available at scale domestically. The U.S. government should take steps to reduce the cost of these inputs , including through tariff relief. Expand complimentary supply chain economic corridors: The economic zone established in the Philippines Luzon Economic Corridor through Pax Silica is a model platform to leverage host-country comparative advantages and surge production of key upstream inputs for U.S. and allied critical infrastructure. We urge the State Department to replicate this model in other jurisdictions.

Ensure cost-competitive access to inputs from partners : The U.S. chip ecosystem relies on imports of specialized inputs – including extreme-ultraviolet lithography machines, advanced materials, chemicals, and highly engineered components – not readily substitutable or available at scale domestically. The U.S. government should take steps to reduce the cost of these inputs , including through tariff relief.

Expand complimentary supply chain economic corridors: The economic zone established in the Philippines Luzon Economic Corridor through Pax Silica is a model platform to leverage host-country comparative advantages and surge production of key upstream inputs for U.S. and allied critical infrastructure. We urge the State Department to replicate this model in other jurisdictions.

Investing in R&D of new materials and recycling technologies Increase federal R&D spending : Recent data shows China is now outspending the United States on research and development. SIA applauds the Commerce Department for awarding nearly $900 million in incentives to support semiconductor and materials breakthroughs. In addition to continued funding for fundamental research through the National Science Foundation, we encourage the CHIPS Research and Development Office to use the Broad Agency Announcement to support pilot line access and capacity to help scale new technologies and processes from laboratory concepts and prototypes to high-volume production and commercialization.

Increase federal R&D spending : Recent data shows China is now outspending the United States on research and development. SIA applauds the Commerce Department for awarding nearly $900 million in incentives to support semiconductor and materials breakthroughs. In addition to continued funding for fundamental research through the National Science Foundation, we encourage the CHIPS Research and Development Office to use the Broad Agency Announcement to support pilot line access and capacity to help scale new technologies and processes from laboratory concepts and prototypes to high-volume production and commercialization.

Targeting priority critical minerals Coordinated investments and financing: The U.S. government’s efforts to identify mining, processing, and manufacturing projects for critical minerals through the State Department’s Pax Silica platform and the USTR-led critical minerals action plans with partners such as the EU , Japan , and Mexico are an important start. SIA identified priority critical minerals for semiconductor manufacturing to aid in identifying projects supported through the U.S. International Development Finance Corporation (DFC) under the Pax Silica platform. We encourage DFC, Pax Silica, and USTR to coordinate across the interagency and industry to support new processing projects that provide the high-purity minerals required for chip production.

Coordinated investments and financing: The U.S. government’s efforts to identify mining, processing, and manufacturing projects for critical minerals through the State Department’s Pax Silica platform and the USTR-led critical minerals action plans with partners such as the EU , Japan , and Mexico are an important start. SIA identified priority critical minerals for semiconductor manufacturing to aid in identifying projects supported through the U.S. International Development Finance Corporation (DFC) under the Pax Silica platform. We encourage DFC, Pax Silica, and USTR to coordinate across the interagency and industry to support new processing projects that provide the high-purity minerals required for chip production.

SIA calls on policymakers to develop targeted supply- and demand-side policies that support domestic supplier expansion and geographic diversification in coordination with like-minded international partners. Shifting and securing supply chains cannot be accomplished overnight and requires sustained action to begin and accelerate the process. Thankfully, the platforms, mechanisms, and tools to do so are already in place and just need to be carefully calibrated in collaboration with industry and the research community to support U.S. semiconductor supply chain resilience.