US efforts to reclaim semiconductor leadership confront deep-rooted challenges in Asia’s dominance, labour shortages, and global interdependence
Once a pioneer in microchip innovation, the United States is now struggling to catch up in a global industry increasingly dominated by Asia. Former US Commerce Secretary Gina Raimondo remarked as early as 2021 that the nation had “dropped the ball” on chip production — a sentiment still echoing today, as former President Donald Trump pushes to revive American manufacturing through aggressive tariffs and investment pledges.
Trump’s renewed strategy centres on using import duties and industrial policy to bring chip jobs back to US soil. However, producing advanced semiconductors is a highly specialised, expensive and interconnected process that has taken countries like Taiwan, South Korea, and Japan decades to master. With entrenched supply chains and talent pools concentrated in Asia, experts question whether the US can realistically replicate that model at scale.
Semiconductors are fundamental to everything from smartphones to fighter jets. Though originally developed in the US, the manufacturing of high-end chips now overwhelmingly takes place in Asia. A typical chip might be designed in California, built in Taiwan using Chinese raw materials, packaged in Vietnam, and finally tested in China before returning to the US in a finished device.
Despite vocal support for domestic production, Trump has also threatened key players in the chip industry. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker, has been warned it could face 100% tariffs unless it significantly expands operations on American soil. The same holds for other giants like Samsung, both of which have received substantial subsidies to establish US facilities.
Yet the expansion has not been smooth. TSMC, investing over $100 billion in the US, and Samsung, with an estimated $6 billion outlay in Texas, have encountered a host of problems — rising costs, construction delays, difficulty sourcing skilled labour, and local resistance. These challenges have undermined the effort to localise chip production quickly.
TSMC’s American plants, for instance, are still behind their Taiwanese counterparts in technological sophistication. According to Chris Miller, author of Chip War, the gap in capacity and efficiency will remain unless the US matches Taiwan’s long-term commitment and investment — something that took decades to build.
One major constraint is immigration policy. Trump’s hardline stance on immigration threatens to restrict the flow of highly trained engineers from countries like India and China, essential for operating the intricate and sterile environments of chip foundries. Even companies like Tesla, backed by Elon Musk, have reportedly faced hurdles bringing in foreign talent under the current visa rules.
Meanwhile, Trump has doubled down on trade measures, launching national security investigations into semiconductor imports. Analysts argue this is creating further instability. Japan, for example, had hoped to revitalise its economy via semiconductor growth, a plan now disrupted by shifting US policies.
Globally, many nations — from Europe to China — are accelerating domestic chip initiatives, spurred by geopolitical uncertainty. Chinese firms like Huawei are actively expanding into regions such as the Middle East and Africa, where market margins are thinner but strategic growth continues.
Still, industry insiders caution against overestimating the US’s ability to quickly replace global networks. TSMC’s original success stemmed from collaboration with US tech firms and an openness to shared expertise — a model incompatible with Trump’s protectionist tilt.
According to Marc Einstein of Counterpoint Research, “This isn’t just about building factories. It’s about nurturing an entire ecosystem — and you can’t do that through isolation.”
Even Trump’s tariffs have shown flexibility under pressure. Lobbying from CEOs like Tim Cook of Apple has already led to selective exemptions. Trump has suggested a willingness to adjust policies when needed, particularly when major US companies express concern.
Some speculate the administration may attempt to force partnerships, similar to previous efforts with companies like ByteDance, pushing TSMC or others to partner with American firms like Intel.
But the lesson from Asia’s rise in semiconductors is clear: building an advanced chip industry requires long-term coordination, skilled labour, stable policy, and international cooperation — not rapid-fire tariffs and fragmented strategy.
Trump’s vision, while ambitious, runs counter to the very forces that made the industry thrive: openness, shared innovation, and a global supply web decades in the making.
