Chipmaking in the United States

U.S. chipmakers outspend and outbuild chipmakers from all other countries. However, because more fabs are built offshore than those from other regions, the United States is only third in terms of new fab activity.

U.S.-based companies outspend other countries

Capital spending by chipmakers headquartered in the Asia-Pacific region continues to outpace that of chipmakers headquartered in the United States and other regions. However, Asia-Pacific is a geographic region, not a country, and comparing a single country against a whole region can be misleading. This is especially true for the United States. On a country-by-country basis, U.S. companies far outspend all other countries (Figure).

Spending by U.S.-based companies is 12 percentage points higher than the two countries tied for second place in this year's spending rankings: Japan and South Korea at 19% each. The current distribution of spending by regionally based countries can be divided into three levels: On top is the United States. The second level has Japan, South Korea and Taiwan, and the third level has Europe, China and Southeast Asia.

On a country-by-country basis, U.S. companies far outpace all other countries in capital spending. U.S. spending is 12% higher than the two countries tied for second: Japan and South Korea.

United States as a center of new fab construction

More than 20% of U.S. companies' fab building takes place outside of the United States. This is balanced partially by offshore companies building fabs there. The result of this imbalance is that the United States as a region does not lead the world in building new fabs, although it remains strongly competitive.

This worldwide distribution of U.S. companies' fab assets is obviously good for the companies. It allows them to shop around for the best package of regional incentives, draw on skilled local workforces, be close to important markets, and diversify risks associated with earthquakes, floods and other catastrophic events.

Moreover, the United States is becoming a more attractive place to build fabs. New York's recent announcement that Advanced Micro Devices intends to build a $3.2B fab there is a case in point; it offered a set of financial incentives that was world-class. The nearby Albany Nanotech Center and IBM's New York campus are also major draws, both for AMD and other chip companies seeking a competitive environment in which to build a fab.

Major manufacturing center in the United States

Since 2004, five companies have accounted for more than 80% of all new fab activity within the United States: Intel, Samsung, Micron (including its IM flash joint venture), Texas Instruments and IBM.

Looking at the period from 2000 to 2007, Texas leads in terms of new fab activity, followed by New York, Arizona, Virginia, Oregon, New Mexico, Colorado and Utah. These eight states account for 95% of all new fab activity that has begun in the United States since 2000. Oregon, Texas and New York are home to some of the leading chip manufacturing development centers in the world. Moreover, with the success of New York's incentive package, other states will follow and make the United States an even more attractive place to build a fab.