The global semiconductor shortage that began in 2020 and peaked in 2021-2022 was not a single crisis but a cascade of failures — natural disasters, geopolitical tensions, pandemic-driven demand shifts and decades of supply chain concentration. Three years on, the industry has invested over $500 billion in new fabrication capacity. But has the supply chain actually become more resilient?
TSMC, the world’s largest contract chipmaker, controls approximately 60% of the global foundry market and over 90% of advanced chip production (7nm and below). The company’s dominance is both its strength and the industry’s single largest point of failure. When TSMC’s Taiwanese fabs were threatened by drought in 2021 — chip manufacturing requires enormous amounts of ultra-pure water — it exposed the fragility of a supply chain concentrated in one company and one geography.
The CHIPS and Science Act, signed into US law in August 2022, committed $52.7 billion in federal subsidies to onshore semiconductor manufacturing. The results are beginning to materialise: TSMC is building a $40 billion fab complex in Arizona; Intel is constructing two new fabs in Ohio at a cost of $20 billion; Samsung is investing $17 billion in a Texas facility. Combined, the CHIPS Act has catalysed over $200 billion in private semiconductor investment in the United States.
But fabs take years to build. TSMC’s Arizona facility, originally scheduled for production in 2024, has been delayed to 2025, with reports of labour shortages and cultural clashes between TSMC’s famously demanding management style and American workers. The lesson is that throwing money at manufacturing capacity does not instantly create a skilled workforce.
Europe, Japan and India have launched their own semiconductor initiatives. The European Chips Act aims to double Europe’s share of global chip production from 10% to 20% by 2030. Japan is subsidising TSMC’s new Kumamoto fab and a Rapidus-led advanced chip project. India has approved $10 billion in semiconductor incentives. The net effect: the semiconductor supply chain is becoming more geographically distributed, which increases resilience but also introduces new coordination challenges. Global chip lead times, which peaked at 27 weeks in mid-2022, had fallen back to 12-14 weeks by early 2025, according to Susquehanna Financial Group — still above the pre-pandemic norm of 10 weeks, but no longer in crisis territory.