The big picture: Driven by the chip shortage and a surge in demand for semiconductors, chipmakers are spending more than ever to expand capacity. While most of this expansion is still expected to take place in Asia, it looks like the US will also gain more ground when it comes to advanced process nodes.

Last week, Samsung announced it would build a $17 billion chip manufacturing plant in Taylor, Texas, confirming earlier rumors that this was a preferred location for a capacity expansion effort known internally as the "Star Project." The new advanced fab will make chips for 5G and machine learning applications, but it won't be operational until 2024.

Japan is looking to reignite its once-dominant silicon industry, and to that end it has allocated over $5.2 billion in subsidies for companies that are interested in building chip fabs locally. The funds will help companies like TSMC, Micron, and Kioxia, who are looking to manufacture DRAM, NAND, and other advanced chips in the country.

According to a report from The Wall Street Journal, the chip shortage and the unrelenting demand for electronics have caused a surge in semiconductor spending in several regions, including the US. Chipmakers are still investing in capacity expansions in China, Taiwan, and South Korea, but they're also interested in how they can create a more resilient supply chain by setting up factories in places like Japan, the US, or the EU.

Gartner estimates investments made by chip manufacturers will total $146 billion this year, which is 50 percent more than capital expenditures made before the pandemic began. It's also double the amount these companies invested in 2016, but 80 percent still goes into building more manufacturing capacity in Asia. Gartner believes this ratio will be similar through 2025, and notes the US is currently capturing around 14 percent of the global investment in semiconductors.

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Analysts also estimate that only about six percent of the semiconductor manufacturing capacity added over the next 10 years will be located in the US. This is why the Chamber of Commerce urged Congress to pass legislation that will see $52 billion in direct subsidies being offered to companies that plan to build new chip factories. However, the cost of operating a chip plant in the US is significantly higher than doing the same in Asia, which means regulators must come up with even more incentives if they hope to attract chipmakers.

China is pouring billions into bolstering its local semiconductor industry, and so are its neighbors. South Korea aims to double its annual chip exports to $200 billion by the end of this decade, and to that end it has offered billions in tax breaks and subsidies, along with promises to ensure an adequate water supply, which is essential for chip manufacturing.

The Biden administration has promised to boost American manufacturing capacity, citing national security concerns. Samsung, TSMC, and Intel are building new factories in the US, but they won't be operational for years. Analysts expect the US will possess around 24 percent of the global production capacity for advanced semiconductors by 2027, but most of it will likely remain in Asia for the foreseeable future.