The semiconductor industry is undergoing a dramatic realignment as countries push for greater self-sufficiency. The U.S., Europe, Japan, and India have all launched multibillion-dollar subsidy programs to boost domestic chip manufacturing capacity. These moves are partly a response to supply chain disruptions during the pandemic and geopolitical tensions involving Taiwan and China.

Companies are responding by announcing new fabrication plants (fabs) in regions previously dependent on imports. Intel, TSMC, and Samsung are expanding production footprints in the U.S. and Europe, while China accelerates efforts to reduce reliance on foreign technologies.

This diversification comes with risks, including higher costs and complex coordination across regions. Nevertheless, governments argue that ensuring chip supply is vital for national security, given semiconductors’ role in everything from smartphones to military systems. The reshaping of the chip industry could define the technological balance of power for decades.