Bridging the Materials Supply Gap in the U.S. Semiconductor Industry
The U.S. semiconductor industry stands at a critical crossroads. As domestic chip manufacturing capacity surges, driven by historic investments and policy support, an urgent and under-appreciated challenge is coming into focus: a looming gap in the supply of essential chemicals and materials needed to make advanced semiconductors.
A Tripling in Demand, a $9 Billion Investment Gap
According to McKinsey, demand for chemicals and materials associated with semiconductor manufacturing in the U.S. is expected to more than triple by 2030, soaring from approximately $4 billion today to $13 billion. Meeting this explosive growth will require a significant ramp-up in domestic production capabilities and a homegrown supply chain in the United States.
Dependence on Imports: A Strategic Vulnerability
A major concern is the U.S.'s continued reliance on Asia for many critical materials. For example, the majority of ultra-high purity hydrofluoric acid (HF), a vital etchant and cleaning agent in semiconductor fabs, is currently imported from Asia, including from Japan, Taiwan, and China. This dependency creates strategic vulnerabilities, especially in an era of heightened geopolitical tension and supply chain disruptions.
Spotlight on CMP Materials: Pads vs. Slurries
Within the broader chemicals ecosystem, the supply situation varies by material. Chemical Mechanical Planarization (CMP) pads, which are used to polish wafer surfaces, are considered to have sufficient domestic supply to scale with demand. However, CMP slurries, complex mixtures containing materials like copper and polycrystalline silicon, are constrained. The production of these slurries is limited by capacity and the complexity of their supply chains, making them a potential bottleneck for U.S. chipmakers. Notably, ChEmpower (backed by Pangaea Ventures in its recent Series A) is one of the companies developing innovative abrasive-free planarization technology that replaces both pads and slurries, aiming to address these slurry supply constraints with a more sustainable and scalable solution.
Why This Matters
The U.S. is making unprecedented investments in semiconductor fabrication capacity, but without parallel investments in the chemicals and materials supply chain, these new fabs risk being underutilized or dependent on fragile overseas supply lines. Closing this gap is of economic importance, and holds great relevance from a national security perspective.
Looking Forward
Solving the materials supply gap will require coordinated action across industry, government, and investors. It means supporting innovative companies developing domestic sources of high-purity chemicals, incentivizing infrastructure for advanced materials, and fostering collaboration across the value chain. The opportunity is clear: by investing in the full stack of semiconductor manufacturing, the U.S. can secure its technological future and build a foundation for sustainable, long-term growth.