Will Trump’s presidency accelerate US semiconductor manufacturing for cloud computing?

US semiconductor manufacturing could undergo significant changes as major chip manufacturers plan to bring new factories online during Donald Trump’s upcoming presidential term.

According to a recent Business Insider report, while the Biden administration laid the groundwork for domestic chip production through the CHIPS Act, the actual manufacturing boom and job creation may materialise during Trump’s presidency.

The initiative began with Biden securing commitments from five global semiconductor giants—TSMC, Intel, Samsung, Micron, and SK Hynix—representing a transformative shift in US semiconductor manufacturing capabilities. As of August 2024, companies in the semiconductor ecosystem have announced more than 90 new manufacturing projects across 28 states, totalling nearly $450 billion in announced investments.

The timing of this manufacturing expansion is particularly significant for cloud computing providers. According to SIA’s 2024 State of the US Semiconductor Industry report, in the decade following CHIPS enactment (2022 to 2032), the US is projected to more than triple its semiconductor manufacturing capacity—the highest rate of growth in the world during that period. 

The report forecasts that the US will grow its share of advanced (less than 10nm) chip manufacturing to 28% of global capacity by 2032 and capture 28% of total global capital expenditures (capex) from 2024 to 2032.

For the cloud computing industry, which has faced significant chip shortages and supply chain disruptions, this expansion of US semiconductor manufacturing capacity offers several strategic advantages:

• Supply chain resilience: Developing domestic chip production facilities will help cloud providers manage supply chain risks better. The SIA report highlights that US fab capacity will increase by 203% from 2022 to 2032, potentially reducing dependence on international manufacturers.
• Advanced technology access: These new facilities will focus on producing leading-edge logic and memory chips, essential components for next-generation cloud computing hardware. The CHIPS Act’s $39 billion manufacturing incentives specifically target such advanced manufacturing capabilities.
• Economic implications: Beyond the Semiconductor Industry Association’s projected 42,000 direct jobs and 101,500 indirect jobs, the expansion could contribute to broader technological innovation in the cloud computing sector. The report notes that the semiconductor industry supports over 300 downstream economic sectors, accounting for over 26 million US workers.

However, challenges remain. The SIA report identifies a projected shortfall of 67,000 technicians, computer scientists, and engineers in the semiconductor industry by 2030. Samsung has reportedly postponed taking deliveries of chipmaking equipment due to a lack of major customers, while other manufacturers face various delays in their construction timelines.

For cloud service providers and their customers, the success of this domestic semiconductor manufacturing initiative could mean more reliable hardware supply chains, lower costs due to reduced international shipping and tariffs, and faster access to cutting-edge chip technology. However, the extended factory completion timeline means these benefits may take several years to materialise.

The SIA report further emphasises that AI will be a crucial driver of semiconductor demand, projecting that by 2030, AI alone could contribute more than $15 trillion to the global economy. This aligns perfectly with cloud providers’ increasing focus on AI services and infrastructure.

As the cloud computing industry continues to grow and evolve, developing robust US semiconductor manufacturing capabilities is crucial for maintaining technological leadership and ensuring service reliability. 

The coming years under the Trump administration will reveal whether this manufacturing boom can deliver on its promises and how it might reshape the landscape of cloud computing infrastructure.

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