The CHIPS Act and the Taiwan share that went up, not down
US imports of integrated circuits from Taiwan climbed from 11 percent of the total in 2021 to 28 percent in 2024. Three years into a $52 billion reshoring push, the trade data is pointing the other way. Here is what it actually means.
The CHIPS and Science Act of 2022 committed $52.7 billion to rebuilding US semiconductor manufacturing. Three and a half years in, Commerce has awarded roughly $33 billion of the $36 billion manufacturing pot. Yet US imports of integrated circuits from Taiwan have more than doubled and Taiwan's share of the US HS 8542 import basket has gone from 11 percent to 28 percent. Malaysia, the historical leader, has lost 16 points of share. This brief reads what the BACI trade data actually shows, separates the AI demand signal from the reshoring signal, and identifies the two places the CHIPS-era signature is already visible.
The promise and the ledger #
The CHIPS and Science Act was signed on August 9, 2022. The headline commitment is $52.7 billion in federal money: $39 billion in direct manufacturing incentives, $13.2 billion in R&D and workforce, plus a separate 25 percent Advanced Manufacturing Investment Credit under IRC Section 48D.
By April 2026, the announcement ledger is essentially written. Commerce had awarded roughly $33 billion of the $36 billion proposed manufacturing pot by early 2025. Final direct grants, after negotiated adjustments: Intel up to $7.86 billion, TSMC up to $6.6 billion, Micron up to $6.165 billion, Samsung reduced to $4.745 billion, GlobalFoundries $1.5 billion, Polar $123 million, plus smaller awards across roughly 40 projects.
The SIA baseline the policy was meant to bend: US share of global wafer fab capacity was 37 percent in 1990, 12 percent in 2020, and 10 percent in 2022. The public target is to triple US advanced-logic capacity by 2032 and return overall share to roughly 14 percent.
Against that ledger, the question is not what got committed. It is what the trade data actually shows three and a half years in. The answer is surprising, and not in the direction the headlines have been covering.
What the BACI panel says about US integrated-circuit imports #
The HS chapter that matters is 8542, electronic integrated circuits. Memory, logic, GPUs, ASICs, and custom accelerators all sit in its subheadings. Using the CEPII BACI January 2026 release (HS17 and HS22 revisions), here is the annual US import total from 2018 to 2024, in billions of current dollars.
| Year | HS 8541 imports ($B) | HS 8542 imports ($B) | Combined ($B) |
|---|---|---|---|
| 2018 | 8.5 | 29.7 | 38.2 |
| 2019 | 11.4 | 27.1 | 38.5 |
| 2020 | 12.9 | 27.0 | 39.9 |
| 2021 | 12.8 | 33.1 | 45.9 |
| 2022 | 18.6 | 38.7 | 57.3 |
| 2023 | 26.1 | 29.6 | 55.8 |
| 2024 | 22.5 | 36.5 | 59.0 |
The Taiwan share went up, not down #
The single most important number in this brief: Taiwan's share of US HS 8542 imports climbed from 11.3 percent in 2021 to 27.9 percent in 2024. In dollar terms, Taiwan-origin US chip imports grew from $3.7 billion to $10.2 billion in three years. That is not a reshoring outcome. It is the opposite.
| Year | Taiwan imports ($B) | US HS 8542 total ($B) | Taiwan share |
|---|---|---|---|
| 2018 | 3.6 | 29.7 | 12.1% |
| 2019 | 2.8 | 27.1 | 10.4% |
| 2020 | 3.1 | 27.0 | 11.3% |
| 2021 | 3.7 | 33.1 | 11.3% |
| 2022 | 8.1 | 38.7 | 20.9% |
| 2023 | 5.8 | 29.6 | 19.7% |
| 2024 | 10.2 | 36.5 | 27.9% |
Why the Taiwan share climbed #
The explanation is not policy failure. It is AI.
NVIDIA's H100 and H200 are fabricated at TSMC in Taiwan. So are the Blackwell B100 and B200 in their 2025 and 2026 ramp. Apple's M-series and A-series silicon, AMD's MI300 line, and most hyperscaler custom accelerators flow through the same fabs. Every one of these chips, when it enters the United States as a packaged part, registers as a Taiwan-origin HS 8542 import. The steeper the AI capex curve, the more Taiwan-origin imports, regardless of what CHIPS-funded fabs are doing in Arizona.
TSMC Arizona Phase 1 (4 nanometer) shipped first silicon in late 2024. Phase 2 (3 nanometer) has been accelerated to 2027. Phase 3 (2 nanometer and 1.6 nanometer) targets 2028 to 2029. Intel Ohio has slipped from its original 2025 target to 2030-2031. Samsung Taylor's mass production has slipped from 2024 to 2027. None of these facilities was contributing materially to 2022-2024 US chip supply. The data reflects that fact.
Malaysia lost 16 points of share. That is the other story. #
Malaysia was the single largest origin of US HS 8542 imports for most of the 2010s and early 2020s. In 2021 Malaysia held 40.6 percent of the US chip import basket. By 2024 that share was down to 24.2 percent. In dollars, the Malaysia flow went from $13.4 billion in 2021 to $8.8 billion in 2024, a 34 percent decline.
Malaysia's role is back-end: OSAT (outsourced semiconductor assembly and test) and packaging. Intel has been a large presence in Penang for decades. AMD, ON Semi, Infineon, ASE, and Amkor all run significant Malaysian operations. When US-designed chips are fabbed in Taiwan or South Korea, packaged in Malaysia, and shipped to US customers, the finished integrated circuit enters the US trade data as a Malaysia-origin HS 8542 import.
Three things are eroding the Malaysia share simultaneously. First, the AI compute stack increasingly bypasses traditional OSAT packaging. TSMC's CoWoS advanced packaging for H100 and Blackwell keeps the chip in Taiwan through the full stack, which means the import shows up as Taiwan-origin rather than Malaysia-origin. Second, Intel has brought more packaging inside the United States under CHIPS funding. Third, the absolute AI hardware supercycle is growing the Taiwan numerator faster than the Malaysia numerator.
This is a subtle CHIPS-era signal that almost no one is tracking. The Malaysia decline is not a weakening of Malaysian capability. It is a shift in where advanced packaging happens in the stack. And it is already visible in the trade data today.
Top exporters of HS 8542 to the US, pre and post CHIPS #
Side-by-side, the composition shift is sharp. Malaysia down. Taiwan up. Israel up. South Korea roughly flat. China down by almost half.
| Exporter | 2021 share | 2024 share | Change |
|---|---|---|---|
| Taiwan | 11.3% | 27.9% | +16.6 pp |
| Malaysia | 40.6% | 24.2% | -16.4 pp |
| Israel | 3.5% | 10.1% | +6.6 pp |
| South Korea | 5.9% | 5.4% | -0.5 pp |
| Ireland | 5.0% | 4.7% | -0.3 pp |
| China | 6.6% | 4.4% | -2.2 pp |
| Mexico | 5.2% | 4.3% | -0.9 pp |
| Vietnam | 5.8% | 3.8% | -2.0 pp |
China share halved. That is the export-control signature. #
China's share of US HS 8542 imports fell from 8.1 percent in 2018 to 4.4 percent in 2024. In dollars, Chinese-origin chip imports are essentially flat across the whole period even as the total basket grew by roughly $7 billion. The relative decline is the downstream signature of US export controls on advanced semiconductors to China (October 2022 rules, expanded 2023 and 2024), plus the concurrent drop in low-end integrated circuits transiting through Chinese packaging.
| Year | China imports ($B) | US HS 8542 total ($B) | China share |
|---|---|---|---|
| 2018 | 2.4 | 29.7 | 8.1% |
| 2019 | 1.2 | 27.1 | 4.5% |
| 2020 | 1.7 | 27.0 | 6.1% |
| 2021 | 2.2 | 33.1 | 6.6% |
| 2022 | 2.6 | 38.7 | 6.6% |
| 2023 | 1.9 | 29.6 | 6.5% |
| 2024 | 1.6 | 36.5 | 4.4% |
The CHIPS signature that is already visible: equipment imports #
The CHIPS Act is not yet visible in HS 8542 outputs. It is very visible in HS 84 equipment inputs. Across the wafer-fab equipment subheadings (HS 848620 lithography and CVD, HS 848640 ion-implantation and deposition), US imports have nearly doubled from $4.1 billion in 2020 to $8.3 billion in 2024.
| Year | HS 848610 ($B) | HS 848620 + 848640 ($B) |
|---|---|---|
| 2018 | 0.2 | 4.5 |
| 2019 | 0.2 | 7.1 |
| 2020 | 0.1 | 4.1 |
| 2021 | 0.1 | 5.1 |
| 2022 | 0.2 | 7.2 |
| 2023 | 0.3 | 6.7 |
| 2024 | 0.5 | 8.3 |
The construction-to-trade lag #
The 4 to 6 year lag between fab groundbreaking and volume chip output is the structural reason the HS 8542 data has not moved in the reshoring direction yet. Each year of the cycle produces a different trade signature.
Year 1 to 2: construction. Capex appears in supplier orders and real-estate data. Zero chip-import effect.
Year 2 to 3: equipment installation. ASML, Applied, Tokyo Electron, Lam deliveries show up in HS 848620 and HS 848640. This is where we are now. The equipment-import doubling above is exactly this phase.
Year 3 to 4: risk production. Early wafer runs, yield tuning. Output is measured in wafers, much of it not yet reaching the HS 8542 trade basket.
Year 4 to 5: volume production. This is when HS 8542 origin shares start to move for specific process nodes. For TSMC Arizona's 4 nanometer Phase 1, this window is 2025 to 2026. For Micron New York memory, 2027 and beyond. For Intel Ohio and Samsung Taylor, late 2020s or later given the announced delays.
Year 5 to 6: full ramp and second-phase commitments.
The implication is that the first measurable reshoring signal in HS 8542 data arrives in 2027, in memory subheadings first (HS 8542 31 and 8542 32 for DRAM, HS 8542 33 for NAND), then advanced logic from 2028 onward.
What enterprises should plan for #
For investors, manufacturers, and policy teams using the HS 8542 trade basket as a reshoring signal, four working assumptions hold.
One. The HS 8542 data will not move visibly in the reshoring direction before 2027. The first measurable movement will be in memory subheadings (Micron), not logic.
Two. Taiwan-origin HS 8542 imports will keep rising in absolute dollars through 2026 because AI demand is growing faster than any single policy can reshape supply. Do not mistake this for policy failure.
Three. The real signature of reshoring is not a decline in total HS 8542 imports. It is a widening gap between US wafer-equivalent production and finished-chip US imports. Track this by pairing HS 8542 with HS 8486 equipment imports and SIA domestic wafer-start data.
Four. Malaysia's declining share is the early CHIPS-era signature most analysts are missing. Intel's Arizona packaging plus TSMC's Arizona packaging investment is already pulling advanced packaging out of Malaysia and into the Taiwan-to-US direct flow. The next phase pulls some of that into a US-to-US flow, which is when the HS 8542 data genuinely turns.
The CHIPS Act will show up in the data. Not yet, and not where the press coverage is looking.
Sources #
- White House: CHIPS and Science Act fact sheet (2022)
- NIST CHIPS for America project awards
- Congressional Research Service: CHIPS Act FAQ (R47523)
- Semiconductor Industry Association 2024 State of the Industry
- SIA America Projected to Triple Chip Capacity by 2032
- CEPII BACI harmonized trade database, V202601
- UN Comtrade Plus
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