This opinion piece is part of Access Partnership’s ‘A Digital Manifesto’ initiative, which recommends a framework to develop US global leadership on digital policy for the first 100 days of the Trump administration.
Semiconductors are the engine for the modern US economy, powering everything from heart monitors to automobiles. Five years ago, when the world faced global semiconductor shortages, a lack of adequate chip supply led to a rise in inflation and weak growth in the US technology sector.
In 2025, the race for artificial intelligence (AI) leadership has made sourcing semiconductors the top national strategic interest. The semiconductors supply is now the leading limiting factor for AI, computing, and telecommunications technologies. As a result, the demand for both leading and mature node chips is accelerating globally. The world’s largest economies have all invested billions of dollars in programmes to shape the semiconductor-led future.
In December 2024, the Biden administration restricted AI chip exports, while the Trump administration has threatened 25% tariffs on foreign semiconductor chips. While these measures may provide short-term advantages due to US firms’ design leadership, they could weaken long-term competitiveness by reducing revenue and limiting global market expansion.
To maintain its leadership, the US should act to address supply chain vulnerabilities and incentivise US-led chip manufacturing. It can do this in two ways: 1) coordinating cross-departmental support for US chip manufacturers to diversify their markets and the supply chain, and 2) updating the CHIPS Act to focus on the right enablers to drive investment.
Recommendation 1: Coordinating cross-departmental support for US chip manufacturers to diversify their markets and the supply chain
A policy environment conducive to US leadership in semiconductor manufacturing touches on multiple policy areas, including trade, tax, science, workforce development, and environmental regulation. To strengthen domestic chip production, US government agencies must take a unified approach – ensuring critical supply chain inputs, while driving demand for US chips both domestically and globally.
Finished semiconductors require a variety of upstream materials, including chemicals and critical minerals used in manufacturing, some of which face government-imposed restrictions. The US must secure domestic sources while diversifying trading partners to mitigate the impact of potential supply disruptions.
Most importantly, made-in-USA chips need greater demand, both in the US and around the world. Additional investments in US manufacturing can catalyse development of best-in-class leading and mature-node chips, but demand will be capped without access to global markets for US chips and downstream electronics. This is especially true given US trading partners’ own efforts at investing in their chip manufacturing. In its first 100 days, the Trump Administration has an opportunity to open the markets that can help sustain US leadership in the sector.
Recommendation 2: Updating the CHIPS Act to focus on the right enablers to drive investment
The CHIPS Act has spurred significant private sector investment in US semiconductor manufacturing across the supply chain, unlocking USD 450 billion in new facilities, operations research, and talent development. According to the industry, the US is poised to make gains in manufacturing and employment from new investments in fab capacity, leading edge fabrication, DRAM memory, analogue, and advanced packaging.
Expanding tax and R&D incentives can further drive investment in the industry. Meanwhile, streamlining qualifications and reducing burdensome requirements could attract more experienced manufacturers and investors, unlocking additional capital. At the same time, incentives could be tweaked to include operational expenses, such as skills development, alongside capital expenditure.
A New Dawn for US Semiconductor Manufacturing
Global supply chains for semiconductors are poised to change significantly over the next decade, driven by staggering government and industry investment. To sustain its leadership in chips – and in AI, cloud computing, and next-generation telecoms – the US government must adopt forward-thinking policies that make chip manufacturing a national priority.
Access Partnership helps clients navigate the global semiconductor policy environment through expert analysis and strategic guidance. We work with policymakers and businesses to shape effective trade and supply chain policies, helping clients understand how to adapt to them. To find out more about how our trade and semiconductor expertise can help you, please contact Abhineet Kaul at [email protected].
