The Chip Insider®–US chip fab plans take off. NAND: This year’s sick man.

US chip fab plans take off: This year's pattern for chip makers to invest in the United States may seem to be new, but it was predicted earlier by TechInsights. Now it’s hard to keep up with. This week, TI said it would spend $60B, creating 60K jobs, to build/expand 7 fabs in the US. This follows a chain with links formed by Micron's recent $200B announcement last week, expansions by GlobalFoundries ($16B) and TSMC ($100B), as well as SkyWater's $110M acquisition of Infineon's Austin fab. These alone are about half of last year's semiconductor revenues… are the result of CHIPS Act subsidies and government pressure? … Or are they rational business decisions that have a real ROI? I argue that the latter is the script this year's investment pattern is playing to… So the big ROI question has become uncertainty over geopolitical issues... Tariffs alone can easily swamp the 10% baseline difference… De-coupling of China’s economy with the US has been happening… since 2016… The mirror image in the bare wafer here has been direct foreign investment in US fabs… Endorsements from C-level executives at Apple, SpaceX, Qualcomm, NXP, and GM were the big surprise… The bottom line is that these investments are tactical consequences of a fundamental strategic shift in semiconductor manufacturing globalization.

NAND: This year’s sick man in the emergency room. Last year it was analog and auto in the ER, while AI was out running a high-growth marathon. AI is still running its marathon, while analog and auto are in recovery. DRAM is riding high with AI, while NAND's woes reveal how the story is far more about how AI computing is restructuring the datacenter than the AI wave is about datacenter versus consumer. TechInsights’ May NAND Market Report noted “falling ASPs exacerbating weak demand” in 1Q 2025 as “Macro uncertainties temper near- and mid-term projections.” So, NAND chip makers have been cutting wafer starts in double-digit percentages to constrain supply… Tariffs don’t provide an explanation. I calculated nowcasts for 2025 to see if there's been a tariff effect. As expected, they still showed no discernible impact. The overall semiconductor market is up 20% YoY through May... NAND… Could it be a classic case of memory oversupply? … What about the demand side? … Most interesting is how data center … structural impact from LLMs …

"History never repeats itself but it often rhymes." – as Mark Twain is reputed to have said