More than half US-owned chipmaking capacity is overseas

Business news | February 2, 2023

By Peter Clarke

American IC manufacturers have 56 percent of their wafer capacity installed at fabs located in other regions of the world, according to a report from Knometa Research.

Given that the United States has far more production capacity than Canada, whose companies own almost no capacity overseas, Knometa’s use of the term American can be taken as a proxy for the US.

At the end of 2022, American companies has an installed manufacturing capacity of 4.6 million 200mm-equivalent wafers per month, with 2.0 million in domestic fabs and 2.6 million in fabs at foreign sites, according to Knometa’s Global Wafer Capacity 2023 report.

Of the major IC producing countries and regions (Americas, China, Europe, Japan, Korea, and Taiwan), the Americas region is unique in that foreign capacity exceeds that of domestic capacity.

Making it overseas

The biggest volumes of offshore capacity for American companies are in Singapore (22 percent share of total), Taiwan (12 percent), Japan (10 percent), Germany (4 percent), Ireland (3 percent), and Israel (2 percent).

Singapore: Micron Technology – 4 fabs, GlobalFoundries – 4 fabs
Taiwan: Micron Technology – 4 fabs, Diodes – 1 fab
Japan: Micron Technology – 4 fabs, TI – 2 fabs, Onsemi – 1 fab
Germany: GlobalFoundries – 2 fabs, TI – 1 fab
Ireland: Intel – 1 fab, Analog Devices – 1 fab
Israel: Intel – 2 fabs

Knometa reckons that with many large fabs in Singapore, Taiwan, and Japan, Micron owns the most offshore capacity, accounting for 65 percent of the 2.6 million wafers in monthly capacity. GlobalFoundries is next with a 14 percent share followed by Intel with 9 percent and Texas Instruments with 5 percent.

All these data sets will change significantly on completion of Intel’s proposed acquisition of Israel’s Tower Semiconductor – with its fabs in Israel and Japan (as well as the US). Had Tower been part of Intel at the end of 2022 with the headquarters of the combined operations being in the U.S., the foreign share of American-owned capacity would be one percentage point higher at 57 percent. The deal is currently awaiting regulatory approval (see Intel set to buy foundry Tower for $5.4 billion).

Making it at home

In the past couple years, American companies have announced several major fab construction projects in the US. Some of these came about as a result of the CHIPS Act passed by the U.S. government in July 2022 to boost American semiconductor research, development, and manufacturing.

American-owned fabs under construction in the U.S. and scheduled to open during 2024-2025 include:

Intel – Fabs 52 and 62 in Chandler, Arizona
Texas Instruments – Fabs SM1 and SM2 in Sherman, Texas
Intel – Fab 27 in New Albany, Ohio
Micron – Fab in Boise, Idaho

Micron will also build a large fab site in Clay, New York, but this project is part of the company’s long-term capacity expansion plans and construction will not begin until 2024 at the earliest (see Micron to build $100 billion megafab in New York state). In January 2023, Analog Devices announced plans to double the capacity of its fab in Beaverton, Oregon (see Analog Devices spending $1 billion on fab upgrade).