Shift in semiconductor manufacturing: How reshoring and near-shoring are reorganizing the global electronics industry

Recent geopolitical tensions and economic uncertainties have prompted companies worldwide to rethink their supply chain strategies. In the semiconductor industry in particular, the concept of reshoring and near-shoring is becoming increasingly important, with production capacities being relocated closer to the domestic markets. This trend could herald a profound shift in global electronics manufacturing.

Geopolitical tensions as a driver

The announcement of extensive tariffs by the US government under President Donald Trump has put a strain on trade relations worldwide. On April 2, 2025, Trump announced a flat import tariff of 10% on all goods, with higher rates for certain trading partners. These measures led to considerable turbulence on the financial markets and triggered fears of a possible global recession.

China responded promptly with its own punitive tariffs of 34% on US goods, further escalating tensions and forcing companies to reconsider their dependence on international supply chains.

Acceleration in reshoring and near-shoring initiatives

As a result of these developments, many companies have started to shift their production facilities closer to their main markets. A survey by Bain & Company revealed that numerous companies are already investing in reshoring and near-shoring projects or are planning to do so. One emerging trend is split-shoring, where companies balance a mix of offshore production with domestic manufacturing to increase flexibility and resilience.

This trend is also clearly evident in Europe. According to a report by The Engineer, manufacturers from the EU and the US are increasingly moving their supply chains to regions such as North America, the UK, Mexico, Vietnam, India and North Africa to minimize geopolitical risks and increase proximity to key markets.

Investments in new semiconductor factories

The semiconductor industry is particularly active in responding to these changes. According to a report by Semi, the start of construction for 18 new semiconductor factories, including three 200 mm and fifteen 300 mm factories, is planned for 2025. Most of these projects are scheduled to go into operation between 2026 and 2027.

Several major projects are underway in North America. Numerous new semiconductor factories are being built in the US and Europe in order to boost regional production and reduce dependence on Asian suppliers.

Challenges and opportunities

Relocating production brings both challenges and opportunities. Setting up new production facilities requires considerable investment and time. According to estimates, the construction of a chip factory costs at least USD 10 billion and takes around five years from the groundbreaking to the start of production.

Nevertheless, these investments offer long-term benefits. Proximity to research and development centers, securing supply chains and reducing geopolitical risks can strengthen companies’ competitiveness and innovative strength. In addition, government initiatives such as the US CHIPS Act and its European counterpart support setting up semiconductor production facilities in their respective regions.

The current geopolitical tensions and economic uncertainties have triggered a paradigm shift in the semiconductor industry. This development could change the global electronics manufacturing landscape permanently.

Sources

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