Several times in the past two years, U.S. Secretary of Commerce Gina Raimondo has cited a version of the same statistic, almost like a mantra.

Several times in the past two years, U.S. Secretary of Commerce Gina Raimondo has cited a version of the same statistic, almost like a mantra.

“Decades ago, the United States produced nearly 40% of the world’s chips. Now, we produce just 12%,” she wrote in a post last month on X (formerly Twitter), echoing similar posts from July 2023, May 2023, and November 2022. “We’re changing that with the CHIPS and Science Act.”

Passed in August 2022, the act is one of the Biden administration’s signature pieces of legislation, earmarking nearly $53 billion in subsidies and investment to convince semiconductor chip companies to move their factories—colloquially known as fabs—back to the United States. It’s a carrot for the industry’s biggest companies, meant to counterbalance the stick of ever-stricter export controls that prevent many of them from selling their products to China.

Indeed, U.S.-China competition is driving much of this. Containing China’s technological advance—particularly in semiconductors and the artificial intelligence applications they power—has been one of the Biden administration’s biggest policy priorities.

But the competition with China is merely accelerating a transition that was already underway, sparked by semiconductor shortages during the COVID-19 pandemic. “You saw kind of a fundamental inflection point where global manufacturers said, ‘This is not anti-China, but we need to build resiliency, and we can’t be overly dependent on one country, frankly even one region,’” said Bruce Andrews, Intel’s corporate vice president and chief government affairs officer who previously served as deputy secretary of commerce in the Obama administration.

Companies have enthusiastically answered the call. At least 70 new projects have been announced since the CHIPS and Science Act was first introduced in 2020, with planned investments totaling $220 billion, according to figures from the........

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