Where the U.S.’s Chip Strategy Is Still Falling Short

Despite major investments in U.S. semiconductor fabrication, critical back-end processes—testing, cutting wafers into individual chips, packaging, and assembly—remain concentrated in Asia, leaving the U.S. supply chain incomplete and vulnerable. High costs, weak demand signals, limited cluster density, and talent shortages hinder domestic expansion. Closing this gap requires three actions: getting chip buyers to price disruption risks into their sourcing decisions, using trade policy to encourage North American production, and creating demand-side incentives that reward buyers for sourcing locally. These moves would help develop a full U.S. semiconductor ecosystem.