Building a Resilient, Thriving US Semi Supply Chain
ABSTRACT
The CHIPS Act was passed with bi-partisan support in 2022 with the main objective of securing semiconductor supplies for the US. A wave of investments has been incentivized by the Act, which will significantly expand the wafer fabrication capabilities in the US, especially for advanced nodes.
However, the objective of secure semiconductor supply chain cannot be achieved without robust and diversified supply chains for chemicals and materials. >100 different chemicals and materials are needed across different steps of the wafer fabrication process, and supply disruption in any of these chemicals could halt to whole process. As the US wafer fabrication capacities grow, the US will be relying on foreign supply chains for ~50% its demand, which exposes the US semiconductor supplies to a variety of risks.
We have assessed the scale-up challenges of a broad variety of chemicals and materials, developing a view on US domestic availability and economic attractiveness. We will talk to a few select examples and highlight the challenges in cost structure and raw materials access US players are experiencing.
A holistic set of fiscal and trade actions can be taken to address the challenges identified to scale up the US supply of critical semiconductor chemicals and materials. An estimated total capital investment of ~$5 Bn and ~$1 Bn/yr ongoing investment could enable robust US domestic supply of chemicals, supporting the chips supply security while creating >4000 jobs and capturing ~$4 Bn recurring revenue in the US market.
ABSTRACT
Chris Musso is a Senior Partner in McKinsey’s Denver office and global leader of McKinsey’s specialty chemicals service. Chris has spent 17 years advising chemicals and advanced materials companies on topics related to growth and strategy. Chris also brings deep experience as an operational leader in industrial businesses, known for driving innovation, growth, and overall profitability. He earned his PhD degree in Technology, Management and Policy from MIT and MBA from Sloan School of Management.