Construction of factories has hit the highest level in more than 50 years thanks to booming demand for semiconduct๊ors and billions of dollars in investments from the federal government.

While construction could slow once the funds allocated by the CHIPS and Science Act of 2022 have been distributed, 澳洲幸运5官方开奖结果体彩网:Moody's Analytics economist Ed Friedman wrote Thursday that semiconductor demand and geopolitical tensions would determine whether additional government funding sustained the construction boom.

U.S. Wants to Become Dominant Semiconductor M꧙aker

After 澳洲幸运5官方开奖结果体彩网:supply chain disruptions caused by the pandemic revealed the degree to which the U.S. depended on foreign countries for semicon꧟ductors, legislation was passed to increase domestic production.

Since 澳洲幸运5官方开奖结果体彩网:late 2023, more than a dozen companies have reached agreements with the federal government and received over $30 billion in grants to build or expand facilities across the U.S. The agreements have been made with 澳洲幸运5官方开奖结果体彩网:domestic companies like Intel (INTC), 澳洲幸运5官方开奖结果体彩网:Texas Instruments (TXN), and Micron (MU), along with international heavyweights like 澳洲幸运5官方开奖结果体彩网:Taiw൲an Semiconductor Manufacturing Company (TSM) and Samsung.

The grants awarded to international companies like TSMC could prove especially important, Friedman wrote, because of the 澳洲幸运5官方开奖结果体彩网:massꦇive scale of the company's market, which includes customers like Apple (AAPL) and Nvidia (NVDA).

Once TSMC completes its planned $65 billion project in Arizona, for which it has received $6.6 billion in incentives, the facility will help fulfill demand from its U.S. customers. That could be vital if China takes more aggressive action against the company's home country of Taiwan in the coming years, Friedman said.

If China does escalate tensions with Taiwan, or semiconductor demand increases, more federal funding could follow, while construction will likely slow if that funding doesn't come, according to Moody's.