US Projected to Triple Semiconductor Manufacturing Capacity by 2032, SIA Reports

WASHINGTON – The US will triple its domestic semiconductor manufacturing capacity from 2022 – when the Chips Act was enacted – by 2032, the Semiconductor Industry Association projects in a report released in May.

The projected 203% growth is the largest projected percent increase in the world over that time.

Developed in partnership with the Boston Consulting Group, the study, titled “Emerging Resilience in the Semiconductor Supply Chain,” also projects the US will grow its share of advanced logic (below 10nm) manufacturing to 28% of global capacity by 2032, up from 0% in 2022. Additionally, America is projected to capture over one-quarter (28%) of total global capital expenditures from 2024-2032, ranking second only to Taiwan (31%). In the absence of the Chips Act, the US would have captured only 9% of global capex by 2032, according to the report.

While the report finds investments from the industry – facilitated by Chips Act incentives – are on track to reinvigorate semiconductor manufacturing in America and reinforce US chip supply chains, it also identifies policy actions that will further strengthen supply chains, support R&D and chip design, grow the semiconductor workforce, and ensure CHIPS delivers maximum benefits to America’s economic and national security.

The report also analyzes the efforts underway in other countries to incentivize chip production and innovation and the criticality of ensuring chip companies have open access to global customers and suppliers, among other topics.

“Effective policies, such as the CHIPS and Science Act, are spurring more investments in the US semiconductor industry. These investments will help America grow its share of global semiconductor production and innovation, furthering economic growth and technological competitiveness,” said Rich Templeton, chairman of the board at Texas Instruments and SIA board chair. “Continued and expanded government-industry collaboration will help ensure we build on this momentum and continue our next steps forward.”

Other key report findings:

• America’s world-leading 203% projected increase in fab capacity from 2022 to 2032 stands in stark contrast to its modest 11% increase from the previous decade (2012-2022), which ranked last among all major chip-producing regions, according to the SIA/BCG report.
• The US share of the world’s chip manufacturing capacity will increase from 10% in 2022 to 14% by 2032, marking the first time in decades the US has grown its domestic chip manufacturing footprint relative to the rest of the world. Without the Chips Act, the US share would have slipped further to 8% by 2032, according to the report.
• The US continues to lead the world in its overall contribution to the global value chain, with strong leadership positions in high value-added areas of chip design, electronic design automation (EDA), and semiconductor manufacturing equipment.

The report also finds industrial policies have the potential to create additional bottlenecks that increase supply chain risk. Certain segments of the semiconductor supply chain are at risk if incentive programs and large-scale industrial policies lead to non-market-based investment, which can result in overconcentration or oversupply. Government incentives should focus on enabling targeted, distributed, market-based investments.

Further, the study highlights the ways in which governments and companies are taking concerted action to increase resilience. The US Chips Act committed $39 billion in incentives for semiconductor manufacturing, plus a separate advanced manufacturing investment tax credit. The European Union unveiled the European Chips Act, China initiated the third phase of its Integrated Circuit (IC) Industry Investment Fund, and various other incentive programs have emerged in Taiwan, Korea, Japan, India and around the world. In parallel, companies have made significant investments in established and new regions. The report projects around $2.3 trillion in capex in 2024-32, compared to $720 billion in the decade prior to enactment of the Chips Act (2013-22).

Despite the progress made to strengthen US-based semiconductor manufacturing, additional government policy actions are needed to help ensure America stays on track to address lingering supply chain vulnerabilities and grow its share of fabrication capacity, while also increasing its strength in areas such as advanced logic, design, EDA, and equipment in the face of growing global competition.

“The CHIPS and Science Act has put America on course to significantly strengthen domestic semiconductor production and R&D, but more work is needed to finish the job,” said John Neuffer, SIA president and CEO. “We look forward to working with government leaders to advance policies that broaden the STEM talent pipeline, invest in scientific research, promote free trade and access to global markets, and expand and extend critical CHIPS incentives.”

TPCA Releases Guide for Energy Conservation and Carbon Reduction

TAOYUAN CITY, TAIWAN – The Taiwan Printed Circuit Association has published the “Guide to Energy Conservation and Carbon Reduction for PCB Factory Facilities and Process Equipment” as a resource for companies in the transition from strategic planning to actual implementation of the net zero initiative.

The guide recommends implementing the process in three phases – start, middle and end.

The start phase requires a full understanding of factory operations, including taking an inventory of each component’s efficiency, digitizing data from large energy-intensive equipment, and transparency of production scheduling.

For the middle phase, the guide recommends setting up a task force to analyze the factory data. The nature of each low-carbon technique can be assessed using rough estimates of technical difficulty, process impact, engineering time, and energy efficiency yield.

During the end phase, the stability of the low-carbon improvement is assessed. Periodic review meetings can also be used to see if the quantitative targets previously set are aligned with the outcomes. If they do align, then assess the feasibility of rolling out the improvement to other facilities or factories. If they do not align, then carry out a review to see if there were any missteps or inaccurate predictions. Continuous improvements can then be implemented through the PDCA cycle.

The guide also includes some common energy conservation and carbon reduction techniques for factory facilities and process equipment:

1. Regular repair and maintenance of equipment and conduits: Aging equipment and conduits can lead to additional power consumption while machines are in operation. It may also increase the risk of higher repair costs and production delays.
2. Replacement with high-efficiency equipment or components: In addition to upgrading to more efficient equipment, the revitalization of old equipment through installation of more efficient motors, pumps, and rectifiers can all yield immediate improvements in energy efficiency.
3. Recycling: Hot water and steam from factory facilities can be recovered and supplied to process equipment that needs warm water. Chemical liquids in production processes can also be revitalized or recovered to reduce waste.
4. Use of low-carbon fuel: Boilers or transportation devices can be converted from oil to natural gas or electricity. Natural gas not only produces fewer CO₂ emissions compared to fuel oil but also emits virtually no sulfur. Not having to store large amounts of heavy oil also increases safety.
5. Smart operations: Factory services can use group control to operate multiple machines in concert with balanced loads. Predictive maintenance can reduce equipment failure rates. Ultimately, advanced sensing technology and real-time data analysis will be used to implement automatic production adjustment for optimal yield and efficiency.

The guide recommends that factories introduce the energy conservation and carbon reduction projects that best fit their situation (e.g., customer requirements, financial report, corporate culture, factory configuration, process characteristics, and so on). The outcomes will vary depending on the actual conditions as well, so it encourages companies to not try to shoehorn the solution. In addition to the self-assessment, discussions must be held with related vendors to determine practical solutions.

Olympic Circuit Technology to Build Thai Factory

HESHAN, CHINA – Olympic Circuit Technology has announced plans to invest up to $200 million to build a factory in Thailand to meet demand from existing and potential overseas clients.

The Chinese PCB fabricator said the new facility in Thailand will allow more flexible handling of likely adverse impacts from macro environment fluctuation, adjustments of industry policies, and the international trade landscape.

OCT has two PCB bases in China’s southern Guangdong province with an output of 4.2 million sq. m. of various PCB types last year. It ranked 36^th in Dr. Hayao Nakahara’s annual NTI-100 list of the world’s largest 40 PCB fabricators.

OCT’s announcement comes after several other Chinese PCB makers have also announced plans for Thai facilities, with companies pledging between $76 million and $96.8 million in investments in the country since the start of last year.

Emerald Technologies Acquires Optimum Design Associates

SAN JOSE – Emerald Technologies in May announced its acquisition of Optimum Design Associates, an electronics design and engineering services company. Terms were not disclosed.

In making the announcement, Emerald Technologies also said that it has rebranded its name and has relocated its corporate headquarters to San Jose, which reflects the company’s continued evolution as a value-added partner to the world’s leading companies, providing mission-critical and highly complex electronic solutions across diverse end-markets and applications.

Optimum had been sold in March 2023 to Tempo Automation, but the deal collapsed due to financial issues at Tempo.

The acquisition, Emerald said, expands its capabilities and strengthens its position as a leader in design, engineering, rapid prototyping, and new product introduction, in addition to printed circuit board assembly, testing, and lifecycle support services to OEM customers working on electronics with the highest reliability requirements.

“We are excited to welcome Optimum to the Emerald family,” said Hartmut Liebel, CEO, Emerald Technologies. “This acquisition allows us to better serve our customers with the most extensive design services and contribute further to the latest innovations in technology and electronics with elite circuit board design techniques.”

“We are thrilled to join Emerald Technologies and look forward to leveraging our expertise to provide value-add services that drive innovation and growth for our customers,” said Nick Barbin, CEO and co-founder, Optimum.

In conjunction with the acquisition, the Emerald Technologies subsidiary brands – DataED, Bestronics, Veris Manufacturing, Saline Electronics, and Ascentron – will all rebrand under the single Emerald Technologies name.

Thailand BOI Expands PCB Manufacturing Incentives

BANGKOK – Thailand’s Board of Investment has approved an expanded definition of PCB businesses to further promote foreign investment in PCB manufacturing and cover the entire supply chain.

In 2023, the BOI approved investment promotion benefits to PCB projects by some 40 companies representing a combined investment of $2.66 billion, or around 96 billion baht. The project applications came from companies based in China, Taiwan and Japan moving their PCB production hub to Thailand, as well as from Thai companies.

The expanded definition of PCB businesses now includes manufacturers of parts and providers of related services such as lamination, drilling, plating, routing and electrical testing, as well as the producers of PCB parts such as copper clad laminate, flexible copper clad laminate and prepreg, plus the producers of raw materials such as dry film, transfer film and back up board.

GPV Opens Expanded Factory in Thailand

VEJLE, DENMARK – GPV Electronics has opened a refurbished factory building in Thailand, adding 7,000 sq. m. (75,347 sq. ft.) of floor space to its existing 15,000 sq. m. facility.

“We are very proud of our new additional capacity in our electronics factory,” said Bjorn Fiskers, managing director at GPV Electronics TH and GPV Mechanics TH. “Now, the next step is re-layout of the existing production and the new area. We are eager to take the new building into use and to start serving our customers from the new facilities.”

The refurbishment took place inside GPV’s previous mechanics factory, located in the same building as its electronics facilities, and gathers the 22,000 sq. m. of electronics production under one roof. In 2023, the company moved its mechanics production into a new factory building near the electronics factory.

“With the handover of our refurbished factory building, we have taken yet another important step in strengthening our operational footprint and expanding our production capacity in Southeast Asia,” said GPV CEO Bo Lybaek. “The new production facilities will help us to meet our customers’ demands and continue to deliver high-quality products.”

Foxconn Reaffirms WI Commitment

RACINE, WI – Foxconn in May stressed its commitment to its Wisconsin operations after Microsoft broke ground on a $3.3 billion data center on a site originally intended for Foxconn.

Foxconn originally announced a $10 billion investment in southeast Wisconsin in 2017, but later scaled back that investment. In 2021, it said it would invest $672 million at the site and forecast 1,454 new jobs, down from the 13,000 that were originally promised.

“Foxconn Wisconsin is a key manufacturing site for data servers,” the company said in a statement. “Our global market share in servers is approximately 40%. Our Wisconsin operations greatly contribute to that market leadership. We are proud of the over 1,000 men and women who work at Foxconn Wisconsin and help make that happen.”

In its statement, the company said it has now invested around $1 billion in Wisconsin and employment at the Racine site continues to grow.

“Employment at Foxconn Wisconsin has grown at least 42% in the three years since 2020,” Foxconn said. “We have been Racine County’s largest taxpayer in recent years. Foxconn supports expansion of technology and innovation to the state, backing bonds that allowed local stakeholders and partners to install world-class infrastructure.”

Microsoft began construction of a data hub on the same site that will train employees and manufacturers on how to best use AI, and said it aims to use the center to train about 100,000 workers across the state on generative AI by 2030. Microsoft said it plans to invest $3.3 billion by the end of 2026, with the addition of around 2,000 permanent jobs once the facility is complete.

Aurelius Breaks Ground on Malaysian EMS Plant

KULIM, MALAYSIA – Aurelius Technologies has begun construction of a new manufacturing plant in Kulim Hi-Tech Park.

The plant, called P5, will be operated by Aurelius’ subsidiary BCM Electronics and is planned to be complete by the end of 2024. The facility will feature 243,000 sq. ft. of advanced manufacturing and R&D space – including nearly 13,000 sq. ft. of clean room facilities, BCM said in a release.

“P5 sets the stage for Aurelius to introduce advanced manufacturing capabilities targeted for automotive components and advanced Internet of Things applications,” BCM said.

The company said it will invest RM450 million ($95 million) into the facility over the next five years, and plans to develop the site into a technology hub.

“We are thrilled to begin construction of the P5 facility, which, once operational, will serve as a new technology hub for our new advanced products,” said Aurelius CEO and executive director Loh Hock Chiang. “This expansion is pivotal for our growth strategy, especially to further grow our market share in automotive and IoT industries, where innovation leads the way.”

ACDi Acquires 4^th East Coast Manufacturing Plant

FREDERICK, MD – ACDi expanded its presence on the East Coast with the acquisition of a manufacturing plant in Kilmarnock, VA.

The company said it signed an asset purchase agreement with QinetiQ to acquire its Virginia facility and assets, including SMT and related assembly equipment. The deal brings ACDi to four East Coast locations with a total of nine SMT lines.

The facility purchase also includes the addition of all manufacturing employees and several new customers. ACDi will continue to build product for customers previously served at the Virginia location and said it plans to add new customers and personnel to meet growing demand for its capabilities.

“This deal not only allows us to add new customers and expand our capacity to better serve existing customers, but it provides an opportunity for skilled labor hiring in the Kilmarnock, Virginia region,” said Bill Hornbaker, president and CEO, ACDi. “This manufacturing plant addition is part of our growth strategy and goal to be the premier provider of electronics manufacturing services on the East Coast.”

“We are thrilled to welcome a leading provider of electronics manufacturing services to Kilmarnock,” said Shawn Donahue, mayor of Kilmarnock. “ACDi’s commitment to growth and excellence aligns perfectly with Kilmarnock’s spirit. Together, we look forward to fostering new opportunities, serving customers with top-notch quality and contributing to the skilled labor force in our region.”

Instrumental Enters Defense Electronics Space

PALO ALTO, CA – Instrumental has announced its entry into the defense electronics industry with an ITAR-compliant environment for its manufacturing data and AI platform.

Integrating AI into the manufacturing process has become increasingly important in accelerating product launches, ensuring quality, and optimizing engineering time, Instrumental said in a release, and with its new AWS GovCloud environment, defense companies can securely extend their digital thread while leveraging AI to accelerate issue resolution, automate inspection, and deliver products on time while increasing yield.

“Instrumental’s technology has been battle-tested by the most admired electronics brands in the world. We are excited to be able to extend this technological advantage to defense and aerospace manufacturers to support their ambitious missions,” said Anna-Katrina Shedletsky, Instrumental cofounder and CEO.

Report: Plexus to Close Oregon Plant

GRESHAM, OR – Plexus in April reportedly notified Oregon officials of plans to close its contract electronics manufacturing factory here by this fall.

The plant’s entire staff of 75 will be let go, the reports said.

No reasons were provided for the closure.

According to the report, Plexus told the state the layoffs could begin in late June and continue through the end of October.

Nortech Systems to Close MN Manufacturing Plant

MINNEAPOLIS – Nortech Systems announced plans to close its manufacturing plant in Blue Earth, MN, by the end of the year.

In the company’s first quarter earnings call, CEO Jay Miller said Nortech will be shifting its wire and cable assembly and system-level assembly manufacturing to its Bemidji, MN, location, and all employees at the Blue Earth facility will be offered jobs at the company’s other Minnesota facilities.

Miller said the Blue Earth facility is an older, less efficient plant, and the Bemidji facility is newer and certified for aerospace and defense.

“It just made sense with a newer, more efficient facility in Bemidji to move operations and hopefully, as many of our really, really good people as possible, up to Bemidji,” he said.

CFO Andrew LaFrence said the company estimates the Blue Earth closing will result in a restructuring charge of $1 million to $1.1 million in the last three quarters of 2024, including estimated noncash impairment charges of $400,000 with the remaining costs consisting of payments to move equipment, shut down the facility, and employee retention.

Miller said Nortech is also reducing the square footage of its Maple Grove, MN, headquarters and engineering facility by almost 30%, which is primarily due to the company’s hybrid remote work arrangements.