Here's How Many Of The World's Microchips Are Made In America

Practically every electronic device you own has something in common: they contain semiconductors, which are also known as microchips. Microchips are miniaturized integrated circuits, each designed to handle a different function. They're usually used for memory storage and data processing. These semiconductors are highly desirable thanks to their multitude of uses and the large worldwide demand for technology. As a result, microchips have the potential to make a huge impact on the economy, depending on where they're produced and how they're imported or exported.

Around 12% of all microchips manufactured globally are made in the United States. Despite that, 48% of the microchip market share belongs to the United States. How is that the case?  It could partially be because manufacturing plants in other countries can be owned by companies from the United States. 56% of the microchip manufacturing capacity of American companies is offshore, meaning they're produced in other countries. For instance, Micron Technology, which is headquartered in Idaho, has a number of plants based outside of the United States, spread across China, Taiwan, Japan, and Singapore.

In some cases where an entire microchip isn't produced in the United States, parts of it might be. For example, Texas Instruments owns microchip wafer plants across the country. The company produces 300-millimeter wafers in its plants located in Texas, Utah, and Portland. These wafers are crucial, as they provide the basis for microchips by creating many duplicate circuits, creating an integrated circuit.

According to the World Population Review, the United States is home to 95 semiconductor manufacturing plants, making it second only to Japan, which has 103 plants. Close behind them are China and Taiwan, each with 81 and 80 plants respectively. There's a steep drop-off after that, as Germany ranks fifth with just 25 plants. With the United States having so many manufacturing plants, it's surprising that it's not responsible for a higher percentage of all microchips produced internationally.

However, not every company that has manufacturing capacities in the United States solely operates out of it. Some companies that have microchip manufacturing plants based in the United States include Texas Instruments, Micron, and GlobalFoundries. Many companies that have plants in the United States also have manufacturers overseas — like Micron, for example. This, paired with global efforts to address the semiconductor shortage in the early 2020s, means that a lot of microchips are produced in other countries besides the United States.

Microchips for some huge brands like NVIDIA and AMD are primarily produced in Taiwan, despite both being American companies. A large number of Taiwan's plants are connected with companies from other countries, including the United States. This is particularly the case when it comes to fabless manufacturers. A fabless manufacturer designs or produces some parts of a microchip, but outsources the fabrication itself. So, a company might produce wafers, which are a component of a semiconductor, in one country, but the chip itself in another. This type of international collaboration means that American companies work closely with overseas fabricators to produce microchips. Moreover, Taiwan Semiconductor Manufacturing Company, the single most valuable microchip company internationally, has a number of subsidiaries in the United States, including two fabricators in Arizona and Washington.