The $500 billion fab race: US ramps up, China closes in

[Daniel Nenni]

US strengthening semiconductor dominance despite China’s ambitions to reach 30% capacity share in 2030

Last month, Yole Group published its annual report, Status of the semiconductor foundry industry 2025, documenting the ongoing investment race among the semiconductor players. The speed of events in that space is extremely fast, and June 2025 brought much more information on the trends Yole Group’s analysts had previously depicted.

Through its detailed monitors and annual reports, Yole Group and its teams deliver key insights into the global semiconductor industry’s dynamics and technology evolution. The author of this article, Pierre Cambou, is Principal Analyst, Global Semiconductors, at Yole Group. Enjoy reading today’s snapshot!

Recent announcements from US foundry players are an indication of their financial strength and regional endeavor:

• - June 12th, Micron $200 billion for 2 fabs in Idaho, 4 fabs in NY, and VA expansion.
• - March 4th, TSMC to invest $165 billion in 3 new fabs and 2 advanced packaging facilities in AZ.
• - June 18th, Texas Instruments to invest $60 billion in 7 fabs, 4 in Sherman, TX, 1 in Richardson, TX, and 2 in Lehi, UT.
• - June 2nd, Samsung investing $37 billion in 2 fabs in Taylor, TX, but facing delays.
• - June 4th, GlobalFoundries to invest $16 billion in fab expansion in Malta, NY, and Vermont, VT.
• - June 30th, Wolfspeed files for Chapter 11 bankruptcy.
• - Previously announced: Intel $32 billion investment in Fab 52 and Fab 62 in AZ

Pierre CambouPrincipal Analyst, Global Semiconductors
This represents a total of approximately $500 billion of ongoing/planned wafer fab investment in the US.

Spread over a 5-year timeline, this represents about one-third of the expected world fab investment. Current Chinese wafer fab equipment (WFE) spending – which is another way to measure the same thing – is currently about 30% of the worldwide spending. The US is upping its investment level to match Chinese levels, but is more concentrated on advanced node capability. This is a departure from the current ~10% of the world’s capacity on US soil; the US share should evolve favorably in the future. Yole Group had predicted an 11% share by 2030, but given the new announcements, this could increase to ~15% of the world’s wafer production capacity by 2030, reinforcing the US as the dominant semiconductor ecosystem in the world.

China gains ground with ambitious capacity plans​

As for mainland China, Yole Group’s analysts identified very interesting disclosures on the status of the Chinese semiconductor industry at the beginning of June 2025:

• On June 10th, Ren Zhengfei – Huawei’s CEO – gave an interview to the People’s Daily

With the acceleration of foundry capacity additions in recent months, mainland China’s wafer fab capacity has reached ~21% of the worldwide capacity and is now on par with South Korea and closing in on Taiwan. By 2030, mainland China should lead the world in terms of production capacity. In the Status of the Foundry Industry report, analysts reported on the significance of this ~30% of worldwide capacity. However, the crucial snippet of information revealed in the Ren Zhengfei interview is the confirmation that some Chinese players are now only one node generation behind TSMC and Samsung; this means the N5-N4 range, which is already 3 years old for these top competitors. To compensate for the lack of transistor density and greater power consumption, Chinese chips need more silicon surface, as seen in some of Huawei’s latest phones, and more processors and memory capacity, as well as about 25% more power (TSMC N5 vs N3 numbers).

This is only a handicap, not a discredit, as five years ago, Huawei’s smartphone sales collapsed when it was blocked from releasing 5G phones. Huawei is back in the 3rd place in the Smartphone vendor ranking list with sales reaching 115 million handsets in 2024, already about half of Samsung’s and Apple’s numbers. Mainland China’s semiconductor industry is strengthening independently of the US and is supported by strong scientific, financial, and infrastructure-building skills.

“While growth is impressive in mainland China, we must keep in mind that the Chinese semiconductor ecosystem is still about 5 to 10 times smaller than the US semiconductor ecosystem,” comments Pierre Cambou from Yole Group.

How will this competition evolve in the future? Do the armed conflicts around the world, the tariff war, and the overall uncertainty levels play a role?
One thing that is certain is that all this uncertainty is benefiting the semiconductor industry. Regionalization is increasing overall spending, and tariff uncertainties are pushing companies to adopt multi-sourcing strategies and increase localization. The most direct consequence is likely to be an increase in average prices across the board, given the increased semiconductor content and demand.

The generative AI data center hype, the healthy growth in consumer electronics, the general adoption of EVs, and higher levels of vehicle autonomy remain strong semiconductor demand pulls, which are doubled down by governments across the globe through subsidies and various constraining policies. War, peace, and life now depend on it; we have entered the age of silicon.

Stay tuned with Yole Group as analysts continue to monitor and analyze the global semiconductor ecosystem. Follow us for timely insights, in-depth market data, and expert perspectives to better understand the forces shaping the future of the industry!

About the author​

Pierre Cambou, MSc, MBA, is Principal Analyst, Global Semiconductors at Yole Group.
Pierre’s mission is dedicated to market & technology analyses of the semiconductor industry.
At Yole Group, Pierre has authored numerous market & technology products. Acknowledged as an expert in the semiconductor industry, he is regularly interviewed and quoted by leading international media. Previously, Pierre held several positions at Thomson TCS, which became Atmel Grenoble (France) in 2001 and e2v Semiconductors in 2006. In 2012, he founded a semiconductor startup, now part of Jooxter. Pierre holds an engineering degree from Université de Technologie de Compiègne (France) and a Master of Science from Virginia Tech. (VA, USA). Pierre also graduated with an MBA from Grenoble’s École de Management (France).

https://www.yolegroup.com/strategy-insights/the-500-billion-fab-race-us-ramps-up-china-closes-in/

 

[hist78]

US strengthening semiconductor dominance despite China’s ambitions to reach 30% capacity share in 2030

Last month, Yole Group published its annual report, Status of the semiconductor foundry industry 2025, documenting the ongoing investment race among the semiconductor players. The speed of events in that space is extremely fast, and June 2025 brought much more information on the trends Yole Group’s analysts had previously depicted.

Through its detailed monitors and annual reports, Yole Group and its teams deliver key insights into the global semiconductor industry’s dynamics and technology evolution. The author of this article, Pierre Cambou, is Principal Analyst, Global Semiconductors, at Yole Group. Enjoy reading today’s snapshot!

Recent announcements from US foundry players are an indication of their financial strength and regional endeavor:

• - June 12th, Micron $200 billion for 2 fabs in Idaho, 4 fabs in NY, and VA expansion.
• - March 4th, TSMC to invest $165 billion in 3 new fabs and 2 advanced packaging facilities in AZ.
• - June 18th, Texas Instruments to invest $60 billion in 7 fabs, 4 in Sherman, TX, 1 in Richardson, TX, and 2 in Lehi, UT.
• - June 2nd, Samsung investing $37 billion in 2 fabs in Taylor, TX, but facing delays.
• - June 4th, GlobalFoundries to invest $16 billion in fab expansion in Malta, NY, and Vermont, VT.
• - June 30th, Wolfspeed files for Chapter 11 bankruptcy.
• - Previously announced: Intel $32 billion investment in Fab 52 and Fab 62 in AZ

Spread over a 5-year timeline, this represents about one-third of the expected world fab investment. Current Chinese wafer fab equipment (WFE) spending – which is another way to measure the same thing – is currently about 30% of the worldwide spending. The US is upping its investment level to match Chinese levels, but is more concentrated on advanced node capability. This is a departure from the current ~10% of the world’s capacity on US soil; the US share should evolve favorably in the future. Yole Group had predicted an 11% share by 2030, but given the new announcements, this could increase to ~15% of the world’s wafer production capacity by 2030, reinforcing the US as the dominant semiconductor ecosystem in the world.

China gains ground with ambitious capacity plans​

As for mainland China, Yole Group’s analysts identified very interesting disclosures on the status of the Chinese semiconductor industry at the beginning of June 2025:

• On June 10th, Ren Zhengfei – Huawei’s CEO – gave an interview to the People’s Daily

With the acceleration of foundry capacity additions in recent months, mainland China’s wafer fab capacity has reached ~21% of the worldwide capacity and is now on par with South Korea and closing in on Taiwan. By 2030, mainland China should lead the world in terms of production capacity. In the Status of the Foundry Industry report, analysts reported on the significance of this ~30% of worldwide capacity. However, the crucial snippet of information revealed in the Ren Zhengfei interview is the confirmation that some Chinese players are now only one node generation behind TSMC and Samsung; this means the N5-N4 range, which is already 3 years old for these top competitors. To compensate for the lack of transistor density and greater power consumption, Chinese chips need more silicon surface, as seen in some of Huawei’s latest phones, and more processors and memory capacity, as well as about 25% more power (TSMC N5 vs N3 numbers).

This is only a handicap, not a discredit, as five years ago, Huawei’s smartphone sales collapsed when it was blocked from releasing 5G phones. Huawei is back in the 3rd place in the Smartphone vendor ranking list with sales reaching 115 million handsets in 2024, already about half of Samsung’s and Apple’s numbers. Mainland China’s semiconductor industry is strengthening independently of the US and is supported by strong scientific, financial, and infrastructure-building skills.

“While growth is impressive in mainland China, we must keep in mind that the Chinese semiconductor ecosystem is still about 5 to 10 times smaller than the US semiconductor ecosystem,” comments Pierre Cambou from Yole Group.

How will this competition evolve in the future? Do the armed conflicts around the world, the tariff war, and the overall uncertainty levels play a role?
One thing that is certain is that all this uncertainty is benefiting the semiconductor industry. Regionalization is increasing overall spending, and tariff uncertainties are pushing companies to adopt multi-sourcing strategies and increase localization. The most direct consequence is likely to be an increase in average prices across the board, given the increased semiconductor content and demand.

The generative AI data center hype, the healthy growth in consumer electronics, the general adoption of EVs, and higher levels of vehicle autonomy remain strong semiconductor demand pulls, which are doubled down by governments across the globe through subsidies and various constraining policies. War, peace, and life now depend on it; we have entered the age of silicon.

Stay tuned with Yole Group as analysts continue to monitor and analyze the global semiconductor ecosystem. Follow us for timely insights, in-depth market data, and expert perspectives to better understand the forces shaping the future of the industry!

About the author​

Pierre Cambou, MSc, MBA, is Principal Analyst, Global Semiconductors at Yole Group.
Pierre’s mission is dedicated to market & technology analyses of the semiconductor industry.
At Yole Group, Pierre has authored numerous market & technology products. Acknowledged as an expert in the semiconductor industry, he is regularly interviewed and quoted by leading international media. Previously, Pierre held several positions at Thomson TCS, which became Atmel Grenoble (France) in 2001 and e2v Semiconductors in 2006. In 2012, he founded a semiconductor startup, now part of Jooxter. Pierre holds an engineering degree from Université de Technologie de Compiègne (France) and a Master of Science from Virginia Tech. (VA, USA). Pierre also graduated with an MBA from Grenoble’s École de Management (France).

https://www.yolegroup.com/strategy-insights/the-500-billion-fab-race-us-ramps-up-china-closes-in/

In the first graph, mixing memory manufacturers' capacity with that of logic chip manufacturers doesn't make sense. In most cases, memory and logic chip manufacturers don't compete with each other, and their fabs can't even switch back and forth between producing memory and logic chips. Their manufacturing technology is different and the end products serve for different purposes.