Hemlock Semiconductor to Receive $325 Million for New Facility Under CHIPS Act

Hemlock Semiconductor

Hemlock Semiconductor (HSC), the only U.S.-based producer of hyper-pure polysilicon, has been preliminarily granted $325 million in funding under the CHIPS Act by the U.S. Department of Commerce. This funding aims to boost domestic semiconductor manufacturing and reduce reliance on international supply chains.

The grant, currently in a non-binding preliminary memorandum of terms phase, is intended to support the construction of a new manufacturing facility on HSC's existing campus in Hemlock, Michigan. The facility will focus on increasing the production of hyper-pure polysilicon, a critical material used in artificial intelligence (AI) chips, microprocessors, and memory devices.

Economic Impact

If finalized, the investment is expected to generate nearly 180 high-skill manufacturing jobs and over 1,000 construction jobs, significantly contributing to the local economy.

The Role of the CHIPS Act

The CHIPS Act, a landmark U.S. policy initiative, is designed to fund domestic research and manufacturing of semiconductors to enhance national security and technological competitiveness. HSC’s expanded capacity under this program will play a pivotal role in meeting the growing demand for semiconductor-grade materials in emerging technologies.

This strategic investment reinforces HSC's position as a critical player in the U.S. semiconductor supply chain, supporting advancements in artificial intelligence, computing, and other high-tech applications.

US Semiconductor Manufacturers Expand with CHIPS Act Funding

US Chip

The US Department of Commerce has allocated CHIPS Act funding to boost domestic semiconductor production. Companies Analog Devices, Coherent, IntelliEPI, and Macom will use this funding to increase manufacturing capacity, modernize facilities, and enhance the US semiconductor supply chain.

Investments in Key Semiconductor Companies

On January 16, the Department of Commerce announced preliminary funding agreements for four semiconductor manufacturers:

• Analog Devices will receive up to $105 million to expand mature node semiconductor manufacturing at its Oregon and Washington facilities. The investment will boost capacity by 70%, focusing on 180nm and 350nm process nodes. It will also expand module production at its Massachusetts facility for commercial, space, and defense applications.

• Coherent will receive up to $79 million to increase 150mm and 200mm silicon carbide (SiC) wafer production at its Easton, Pennsylvania facility. The expansion will add 750,000 substrates per year and double epitaxial wafer output, supporting energy and military applications.

• IntelliEPI will use $10.3 million to modernize its Allen, Texas facility, which produces epitaxy materials for indium phosphide, gallium arsenide (GaAs), gallium antimonide, and gallium nitride (GaN) wafers. These materials are essential for defense, AI, data centers, telecommunications, and automotive industries.

• Macom has announced a $345 million investment over five years, supported by up to $180 million in CHIPS Act funding, federal tax credits, and state funding. The company will modernize its Massachusetts and North Carolina wafer fabrication plants. Its Massachusetts facility will upgrade 100mm production lines for GaAs, GaN, and silicon materials and install 150mm GaN-on-SiC manufacturing. In North Carolina, Macom will develop 150mm wafer production and expand metal-organic chemical vapor deposition (MOCVD) epitaxial growth.

Strengthening the US Semiconductor Supply Chain

The CHIPS Act investments will expand domestic semiconductor production, ensuring a more resilient supply chain for key industries such as automotive, defense, telecommunications, and AI. These companies will also benefit from the Advanced Manufacturing Investment Tax Credit, which covers 25% of qualified capital expenditures.

By scaling up domestic semiconductor manufacturing, the US aims to reduce dependence on foreign suppliers and strengthen its position in advanced technology sectors.

Indium Phosphide Exports Become China’s New Chokepoint in AI Data Centre Supply Chain

AI data centre

Indium phosphide exports have become a strategic pressure point in the global AI data centre supply chain as China’s licensing controls delay shipments of a material essential for high-speed optical chips. The restrictions are exposing a new vulnerability in AI infrastructure: the physical materials behind silicon photonics and optical interconnects.

The issue has moved quickly from a specialist semiconductor concern to a high-level trade and industrial policy problem. Coherent, a key optical components supplier backed by Nvidia, warned in early May that indium phosphide shortages were already affecting the market. Its chief executive then joined a US business delegation to China as companies sought relief from export licence delays.

Indium phosphide exports matter because AI data centres are moving beyond copper-based interconnects. As AI workloads grow, hyperscalers need faster, lower-latency and more energy-efficient data transmission between processors, accelerators, switches and optical modules. Indium phosphide is one of the core materials enabling that shift.

The material is used in high-speed optical chips, lasers, detectors and photonic components. These devices support the optical links that move huge volumes of data across AI clusters. Without reliable indium phosphide substrates and wafers, the expansion of advanced AI data centre networks could slow.

China’s control over indium phosphide exports shows that critical materials policy is becoming more granular. Beijing no longer needs to restrict only rare earths or finished technology products. It can also influence upstream compounds, substrates and wafers that determine whether advanced semiconductor supply chains can scale.

Export Controls Expose a Hidden Bottleneck in Silicon Photonics

Silicon photonics has become a critical technology for AI infrastructure because it allows data to move through light rather than electrical signals. This reduces energy use per bit and supports the bandwidth required by large AI systems.

But silicon photonics is not only a silicon story. The most advanced optical systems often require compound semiconductor materials such as indium phosphide, gallium arsenide, gallium nitride and germanium-based compounds. Indium phosphide is especially important for lasers and high-speed optical devices.

This creates a difficult supply chain problem. AI companies, hyperscalers and chipmakers are racing to scale optical modules, but one of the key substrate materials remains highly concentrated. China is the world’s largest indium producer, accounting for about 70% of global output in 2024.

That concentration became more serious after China introduced export restrictions on indium phosphide in February 2025. Since then, licence delays have created backlogs for companies that manufacture or source InP substrates from China.

AXT, one of the world’s largest indium phosphide substrate producers and a major supplier to Coherent, said export permits were its most significant challenge. The company manufactures most of its InP substrates in China and only received its first permits last June. It still faces a large order backlog.

The effect has spread beyond individual suppliers. Coherent, Lumentum, VPEC and LandMark Optoelectronics all sit inside the optical components ecosystem that depends on reliable substrate supply. When permit delays hit upstream InP material, the impact moves through wafers, chips, optical modules and AI data centre equipment.

Prices show the severity of the shortage. Since China introduced export restrictions, the average price of a 6-inch indium phosphide wafer has surged by 250% to about $5,000. That price increase reflects both physical scarcity and the strategic premium attached to non-disrupted supply.

The supply squeeze also comes at a time of aggressive photonics investment. Nvidia announced $2bn investments each in Coherent and Lumentum in March. Marvell Technology also moved into photonics through its acquisition of Celestial AI, reflecting stronger demand for optical technology in AI computing.

These investments show where the industry is heading. AI infrastructure needs optical interconnects to manage power, latency and bandwidth. But China’s indium phosphide controls mean that materials availability could become a gating factor for deployment.

Companies are trying to respond. Coherent plans to double its InP wafer capacity at its Texas plant this year and more than double it again by the end of 2027. US photonics firms are also seeking supply from non-Chinese producers such as Sumitomo Electric Industries.

However, capacity additions are slow. New substrate plants can take two to three years to bring online. Qualification cycles are also long because optical chipmakers cannot easily switch substrate suppliers without testing performance, reliability and consistency.

This makes the shortage difficult to solve quickly. Even if new capacity is announced, it may not arrive fast enough to meet near-term AI data centre demand. Meanwhile, many non-China producers already consume part of their own output internally, reducing the amount available to the broader market.

China’s Materials Chokepoint Strategy Strengthens Domestic Producers

China’s indium phosphide export controls are creating both pressure and opportunity. They restrict global supply, but they also support domestic Chinese substrate producers that are expanding capacity.

Yunnan Germanium, Guangdong Xiandao and Zhuhai Dingtai Xinyuan are among China’s leading domestic InP substrate players. Their role is becoming more important as Beijing uses materials controls to strengthen strategic leverage across semiconductor and AI supply chains.

Yunnan Germanium has already moved to expand. The company announced a 189mn yuan investment in April to raise production capacity to 450,000 single InP wafers annually. Its shipments of InP wafers rose by 74% in 2025, showing fast domestic market growth.

Guangdong Xiandao is also expanding through its subsidiary Guangdong Xianrui. The project is expected to produce 40 t/yr of indium phosphide crystals, which are used as raw material for substrates.

These investments fit a broader pattern. China is not only defending control over upstream critical materials. It is also building downstream processing capacity in higher-value compound semiconductor materials.

However, Chinese producers may not immediately solve the global shortage. Some are still seeking export approvals, and any overseas shipments may be limited. Domestic demand remains a priority, especially as China builds its own AI, optical communications and semiconductor ecosystem.

AXT

Supplier qualification creates another barrier. Companies such as Coherent and Lumentum are unlikely to switch easily from established suppliers. Coherent relies heavily on AXT, while Lumentum sources mainly from Sumitomo and JX Advanced Metals. New suppliers must pass demanding qualification cycles before they can enter critical optical chip supply chains.

This gives China’s export controls a long-lasting effect. Even if alternative suppliers exist, the market cannot instantly redirect demand. The bottleneck is not only production volume. It is qualified, high-quality, customer-approved substrate supply.

The strategic lesson is clear. AI supply chains are not only exposed to advanced chips, GPUs and packaging capacity. They also depend on a deep materials stack that includes indium, phosphorous chemistry, InP crystals, substrates, wafers, lasers, detectors and optical modules.

This is why indium phosphide exports have become so important. AI data centre buildouts need more optical links as clusters grow larger. Copper interconnects face limits in speed, distance and energy consumption. Photonics offers a solution, but only if the materials chain can scale.

For the US and its allies, the response will likely require more than emergency licence negotiations. It will require investment in indium recovery, InP crystal growth, substrate manufacturing, wafer capacity and long-term offtake agreements. It may also require strategic stockpiles for high-purity indium and compound semiconductor substrates.

The issue also strengthens the case for recycling and secondary recovery. Indium is often produced as a by-product, making primary supply difficult to expand quickly. Recovering indium from industrial scrap, displays, semiconductors and related waste streams could become more important if export controls persist.

For AI data centre developers, the risk is timing. Demand for optical modules is accelerating now, while new ex-China capacity may not fully arrive until 2027 or later. That mismatch could raise costs, delay deployments and intensify competition for qualified photonics suppliers.

The market may therefore see a split. Companies with secured InP supply will be better positioned to support hyperscaler demand. Companies exposed to licence delays, qualification bottlenecks or spot-market wafers may face higher costs and delivery risk.

The Metalnomist Commentary

China’s control over indium phosphide exports shows that the AI race is becoming a materials race. The next bottleneck may not be only GPUs or power supply, but the compound semiconductor substrates needed to move data fast enough inside AI clusters.

Asia Semiconductor Demand for AI Data Centres Surges on Regional Infrastructure Expansion

AI

Asia semiconductor demand for AI data centres is accelerating rapidly, driven by generative AI development, regional cloud infrastructure investment, and rising demand for high-bandwidth memory and logic chips. The shift marks a geographic rebalancing in semiconductor orders, which were previously centered on U.S. data centre growth.

AI, HBM, and Logic Chips Drive Semiconductor Orders in Asia

Dutch semiconductor equipment maker BESI reported increased orders from Asian subcontractors in Q1 2025, specifically for AI-related data centre applications. Orders rose 3.3% year-over-year and 8.2% quarter-over-quarter, even as other segments like mobile and automotive remained weak.

AI-centric devices are boosting demand for advanced semiconductor packaging, especially for high-bandwidth memory (HBM) 4 and logic chips. BESI received hybrid bonding orders from two memory producers and additional logic chip orders from an Asian foundry, underscoring regional momentum. Compound semiconductors and minor metals remain essential to meet AI’s performance, efficiency, and optical communication needs.

Chinese data centres, in particular, are preparing for broader adoption of optical technologies and laser detectors as they scale capacity to support domestic AI models like DeepSeek.

China, Singapore, and Malaysia Lead AI Data Centre Build-Out

China is rapidly scaling its AI data centre footprint. GLP, a Singapore-China investment firm, raised ¥2.6bn ($356.7mn) for a Beijing-area data centre and controls 20 data centres with a total capacity of 1.4GW across major regions. This expansion is backed by Chinese policy support for AI, cloud, IoT, and 5G development, with the country’s data centre market forecast to grow at a 38% CAGR through 2029.

Singapore remains southeast Asia’s largest data hub, hosting 1.4GW of capacity with expansion plans. However, regulatory restrictions on power and land usage are slowing growth. Meanwhile, Johor, Malaysia, is emerging as a new hotspot, with projected capacity of 1.6GW—poised to surpass Singapore.

Chinese firms have invested over $10bn in Malaysian data centres since 2019. Companies like ByteDance and Alibaba Cloud are leveraging Malaysia’s semiconductor-friendly environment to bypass U.S. export controls and support international operations.

The Metalnomist Commentary

The boom in Asia semiconductor demand for AI data centres signals a decisive shift in global digital infrastructure. As U.S. restrictions reshape supply chains, Asia is emerging as the new battleground for AI-optimized semiconductor and data centre development—anchored by domestic innovation and strategic capital deployment.

Wolfspeed Secures $2.5B Funding to Expand Silicon Carbide Production in the US

Wolfspeed

Wolfspeed, a prominent US-based semiconductor manufacturer, is poised for significant expansion, targeting a $2.5 billion funding pool to boost its silicon carbide (SiC) production. This strategic move is aimed at addressing the surging demand from electric vehicle (EV) manufacturers and other industries reliant on SiC technology.

Key Funding Milestones

Wolfspeed has entered into a preliminary memorandum of terms (PMT) with the US Commerce Department, securing up to $750 million in direct funding under the Chips and Science Act. To meet the conditions for full funding, the company has also obtained $750 million in financing from a consortium of investment funds.

An additional $1 billion is expected in cash rebates through the advanced manufacturing tax credit provided by the Chips and Science Act. This credit allows companies to claim up to 25% of qualified capital expenditures, further bolstering Wolfspeed’s financial framework.

The funds will enable Wolfspeed to achieve two critical objectives:

Construction of a new SiC wafer manufacturing facility in Siler City, North Carolina.

30% expansion of its SiC power device production plant in Marcy, New York.

These projects are set to create the world’s largest 200mm SiC production footprint, serving key sectors such as automotive, industrial, and energy.

Supporting the EV Revolution

Silicon carbide is a pivotal material for the EV industry due to its superior efficiency in power conversion and thermal management. Wolfspeed’s expanded production capacity aims to solidify its leadership in the SiC market, addressing the rapidly increasing demand driven by global EV adoption.

Driving US Semiconductor Leadership

Wolfspeed’s ambitious initiatives align with the US government’s objectives under the Chips and Science Act, which seeks to strengthen domestic semiconductor manufacturing capabilities. These projects also underscore the growing importance of public-private partnerships in ensuring the US maintains its competitive edge in the global semiconductor industry.

With this funding in place, Wolfspeed is well-positioned to lead the SiC revolution, supporting advancements in clean energy, EV technology, and industrial applications.

Texas Instruments Secures $1.6 Billion in CHIPS Act Funding for Semiconductor Expansion

Texas Instruments

The U.S. Department of Commerce has awarded $1.6 billion to Texas Instruments under the CHIPS and Science Act, supporting the construction of two semiconductor fabrication plants in Sherman, Texas, and one in Lehi, Utah. This funding is part of the U.S. government’s push to strengthen domestic semiconductor production and reduce reliance on foreign supply chains.

Texas Instruments is currently building three large-scale 300mm wafer fabrication facilities, all of which are set to operate using 100% renewable electricity by 2027. The Sherman facilities are expected to commence operations in 2025, while the Utah facility is scheduled to begin production in 2026.

Additional Federal Incentives Expected

Beyond the CHIPS Act funding, Texas Instruments anticipates an additional $6 billion to $8 billion in funding from the U.S. Treasury Department's Investment Tax Credit, which supports manufacturing investments under the federal initiative.

These investments align with the Biden administration’s semiconductor strategy, aiming to enhance domestic chip production, support clean energy initiatives, and boost national security in the semiconductor supply chain.

Pax Silica silicon supply chain initiative reshapes US semiconductor partnerships

Pax Silica

The Pax Silica silicon supply chain initiative signals a new US push to secure silicon inputs. The US will partner with Japan, South Korea, Singapore, and other allies. Therefore, the Pax Silica silicon supply chain initiative links minerals, energy, and manufacturing into one strategy.

The initiative targets upstream security across the silicon value chain. It aims to secure critical mineral and energy inputs for silicon processing. Meanwhile, it also promotes downstream joint ventures for chips and AI infrastructure.

Pax Silica targets refining, processing, and infrastructure buildout

The plan prioritizes new mineral refining and processing capacity. It also supports expansion of data centers and fiber optic cables. As a result, the Pax Silica silicon supply chain initiative connects material supply to digital buildout.

Polysilicon sits at the center of this effort. Polysilicon reaches ultra-high purity and feeds silicon wafer production. Therefore, the US polysilicon supply chain matters for AI chips and advanced semiconductors.

US demand for AI chips exposes supply concentration risks

US wafer capacity gaps now collide with surging AI demand. Industry data says a small group of suppliers dominates global wafer output. However, current US-based production cannot meet rising domestic AI needs.

The partnership list also signals strategic alignment beyond manufacturing. It pairs trusted jurisdictions with investment in processing and infrastructure. Meanwhile, it raises the bar for traceability, resilience, and speed across the silicon supply chain.

The Metalnomist Commentary

This initiative will reward projects that lock in low-cost power and reliable refining capacity. However, permitting timelines and technology transfer terms will decide real supply growth. Therefore, buyers will track near-term contracts more than long-term diplomacy.

US Strategic Mineral Reserve at Hawthorne Signals New Industrial Policy

Volato Group

The US strategic mineral reserve at Nevada’s Hawthorne Army Depot marks a new security play. The US strategic mineral reserve will store, refine, and distribute critical materials. Therefore, the US strategic mineral reserve directly targets defense and semiconductor bottlenecks.

Public-private structure ties industry to national security

Volato Group and M2i Global will develop and operate the reserve. The partnership includes the DoD, DLA, and DOE. As a result, governance spans procurement, logistics, and technology. The consortium plans to add private and international partners. This broad network aims to scale capacity and resilience quickly.

What the reserve will hold—and why it matters

The reserve will prioritize gallium, graphite, and copper. These metals underpin missiles, chips, EVs, and grid storage. Meanwhile, the US still lacks domestic processing depth. Gaps persist in cobalt, nickel, lithium, and rare earths. Consequently, a refining and distribution hub can shorten lead times. It can also stabilize supply during geopolitical shocks.

The Metalnomist Commentary

This move shifts the conversation from stockpiling to an operating capability. Watch whether gallium and graphite refining reach commercial cadence. Execution at Hawthorne will signal if the US can finally derisk upstream inputs for chips and defense.

India to Invest $393 Million in New Semiconductor Facility

The Indian government has approved a significant investment of Rs33 billion ($393 million) for a new semiconductor manufacturing facility in Sanand, Gujarat. This funding is part of an incentive scheme introduced in December 2021.

The new facility, operated by Kaynes Semicon, is expected to produce 6 million chips per day. It will cater to various sectors, including industrial applications, automotive, electric vehicles, consumer electronics, telecommunications, and mobile phones. The facility will also increase India's demand for key semiconductor materials such as silicon, antimony, and germanium.

Previously, the Indian government had approved three other semiconductor manufacturing units: two by Tata Electronics in Dholera, Gujarat, and Morigaon, Assam, and one by CG Power in Sanand. Additionally, the Union Cabinet approved the country's first semiconductor assembly unit in Sanand in June 2023.

This new facility will be funded under a Rs76 billion scheme aimed at developing semiconductor and display manufacturing in areas of "strategic importance and economic self-reliance," as approved by the Union Cabinet on December 15, 2021.

The four manufacturing units, with a total investment of nearly Rs1.5 trillion, will collectively have a production capacity of about 70 million chips per day, bolstering India's chip-making ecosystem.

TSMC Boosts 2024 Revenue by 30% Fueled by Rising AI Chip Demand

TSMC

Surge in High-Performance Computing and AI Applications Drives Growth

Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading semiconductor manufacturer, reported a 30% increase in revenues last year, reaching $90.08 billion. This significant growth was primarily driven by heightened demand for chips utilized in high-performance computing (HPC) and artificial intelligence (AI).

Quarterly Performance and Sector Breakdown In the fourth quarter alone, TSMC's revenue soared by 37% year-over-year to $26.88 billion. HPC chips emerged as the primary revenue generator, accounting for 51% of total revenue, up from 43% in 2023. In contrast, revenue from smartphone applications slipped to 35% from 38%, reflecting a slight shift in market dynamics. Additionally, the Internet of Things (IoT) and automotive sectors contributed 6% and 5% to the revenue, respectively.

Strategic Expansions and Future Outlook 

TSMC is setting revenue targets between $25 billion and $25.8 billion for the current quarter, anticipating a seasonal dip in smartphone demand. Meanwhile, the demand for AI accelerators continues to grow, with TSMC's CEO, CC Wei, expecting it to remain a strong revenue driver in the foreseeable future. The company's strategic expansions include the commencement of high-volume production at a new fabrication plant in Arizona and plans for a new facility in Dresden, Germany, dedicated to automotive chip production.

Uber Rivian Robotaxi Partnership Signals New Demand for Lidar Minor Metals

Uber Rivian Robotaxi

Uber Rivian robotaxi partnership plans mark a renewed US push into autonomous vehicle deployment after years of setbacks across the sector. Uber will invest up to $1.25 billion in Rivian to place 50,000 autonomous robotaxis on the Uber platform from 2028, beginning in San Francisco and Miami.

The Uber Rivian robotaxi partnership will start with 10,000 midsize SUVs. The companies can later negotiate up to 40,000 additional vehicles from 2030, with purchases handled by Uber or its fleet partners.

The investment is tied to autonomy milestones, showing that Uber wants exposure to robotaxi growth without rebuilding its own self-driving division. For Rivian, the deal offers potential volume, investor momentum, and a clearer route to monetize its autonomous vehicle technology.

Rivian Autonomy Suite Adds Metals Exposure to Robotaxi Growth

Rivian will supply the robotaxis through its third-generation autonomy suite, launched in December 2025. The system uses cameras, radars, Lidar sensors, and Rivian’s own high-powered inference chips.

This technology stack makes the robotaxi business a materials story as well as a software story. Lidar-rich autonomous platforms increase demand for advanced semiconductors, optics, sensors, and specialty materials.

Minor metals such as gallium, indium, and germanium are especially relevant because they support components used in optoelectronics, power electronics, infrared sensing, and Lidar-related systems. As autonomous driving hardware becomes more complex, these materials gain strategic importance in the EV supply chain.

US Autonomy Push Follows China’s Lidar-Rich EV Trend

Uber’s move reflects a broader return of US interest in autonomous mobility. The company sold its self-driving division in 2020 after high costs and safety problems, but it is now using partnerships to re-enter the market.

Rivian’s use of Lidar places it closer to the hardware trend already visible in China, where carmakers have added Lidar to midrange EVs to differentiate vehicles in a crowded market. That trend has already drawn attention from suppliers expecting stronger demand for gallium, indium, and germanium.

The partnership also arrives as Rivian looks for new growth after deliveries declined last year. Alongside the robotaxi plan, Rivian is pushing its smaller R2 platform and expects to use LG Energy Solution’s 4695 cylindrical cells for future production.

The Metalnomist Commentary

The Uber Rivian robotaxi partnership shows that autonomous vehicles could reopen a new demand channel for specialty metals and sensor materials. If robotaxi fleets scale, the strategic bottleneck may shift from vehicle assembly to Lidar, chips, battery cells, and the minor metals behind advanced sensing systems.

Weaker Demand Leads to Lower Bids at Facor Ferro-Chrome Auction

Ferro-Chrome India

The January ferro-chrome auction conducted by Vedanta-Ferro Alloy (Facor) in India witnessed a substantial decrease in bids, signaling weaker demand in both domestic and export markets. Facor offered two lots of 10-150mm 60% grade ferro-chrome and one lot of ferro-chrome chips.

Auction Results Indicate Market Pressures

The larger lot of ferro-chrome saw bids at Rs 99,200/tonne ex-works, a notable reduction of Rs 4,440/tonne from the December auction. The smaller lot was sold at Rs 99,800/tonne ex-works. Bids for the 10-20mm ferro-chrome chips reached Rs 95,800/tonne ex-works. These lower bids reflect the softening demand for ferro-chrome, a key ingredient in stainless steel production. The results of this auction highlight the challenges faced by ferro-chrome producers in the current market environment.

Texas Instruments Expands Chip Manufacturing with Two New Fabs in Texas

Texas Instruments

Texas Instruments Expands Domestic Semiconductor Capacity

Texas Instruments (TI) will build two new semiconductor fabrication facilities in Sherman, Texas, as part of its $60bn investment plan. The company aims to strengthen domestic semiconductor production amid rising demand and strategic US policy support. These facilities will join seven other fabs already operating or planned across Texas and Utah, collectively expected to produce hundreds of millions of chips daily at full capacity.

Federal Support Boosts Semiconductor Manufacturing Investment

The US government is playing a central role in enabling TI’s semiconductor expansion. In 2024, TI secured $1.6bn under the US Chips and Science Act to support construction of its first two Sherman fabs and its second Lehi, Utah, facility. The company also expects $6bn–8bn in additional tax credit funding from the US Treasury Department’s advanced manufacturing investment program. If Congress raises the investment credit percentage from 25pc to 30pc, TI could gain further support for its projects.

Broader Impact on Semiconductor Supply Chains

TI’s semiconductor fabs will play a crucial role in securing critical supply chains for US industries. The company produces analog and embedded processing semiconductors for major customers such as Apple, Ford, Medtronic, Nvidia, and SpaceX. By expanding capacity, TI will help reduce reliance on foreign semiconductor sources, strengthen resilience against supply shocks, and enhance competitiveness across technology and automotive markets.

The Metalnomist Commentary

Texas Instruments’ expansion reflects the reshaping of global semiconductor supply chains under US industrial policy. While the $60bn investment is significant, its real impact lies in reducing import dependency and fortifying key technology sectors. The fabs will strengthen US capabilities in advanced manufacturing, ensuring long-term resilience in a geopolitically sensitive industry.

European Chip Joint Venture Begins Construction of Advanced Semiconductor Plant in Germany

European Semiconductor Manufacturing Company (ESMC), a joint venture formed by Taiwan Semiconductor Manufacturing Company (TSMC), Robert Bosch, Infineon Technologies, and NXP Semiconductors, has officially started construction on a groundbreaking new chip manufacturing plant in Dresden, Germany. This plant, strategically located next to Bosch's existing semiconductor wafer fabrication facility, is set to become the European Union's first foundry capable of producing fin field-effect transistors (FinFET).

Construction of the plant, which is expected to begin later this year, marks a significant milestone for the EU's semiconductor industry. The facility will be equipped to produce 40,000 300mm (12-inch) wafers per month using TSMC's 28/22 nanometer (nm) planar complementary metal-oxide-semiconductor (CMOS) technology and its more advanced 16/12nm FinFET process technology. These technologies utilize metals such as silicon, gallium, and indium, essential for manufacturing high-performance chips.

The Dresden plant aims to bring TSMC’s cutting-edge semiconductor manufacturing capabilities to Europe, addressing the rapidly growing demand for advanced chips in the automotive and industrial sectors. With the global semiconductor shortage highlighting the need for robust local production, this facility is expected to play a crucial role in strengthening Europe’s technological independence.

The total investment for the Dresden plant is projected to exceed €10 billion. The European Commission has approved €5 billion in funding from the German government under EU state aid regulations, underscoring the strategic importance of this project to the region's economic and technological future.

AI Growth Boosts Electronics Metal Demand, But Broader Semiconductor Market Faces Weak Recovery

AI

The explosive growth of Artificial Intelligence (AI) is undoubtedly driving demand for specific electronic metals, but the broader electronics market, particularly the semiconductor sector, is struggling with a slower-than-expected recovery. As we approach 2025, the demand outlook remains mixed, despite AI's role in pushing innovation and technological expansion.

AI Fuels Electronics Demand

This year, AI technologies, especially AI-powered chatbots and smartphones, gained widespread traction. Companies like Apple and Samsung have been rolling out their own AI systems, with Apple’s “Apple Intelligence” software joining Samsung’s Galaxy AI. At the same time, OpenAI's ChatGPT reached 200 million active weekly users, doubling from the previous year. These developments indicate the mainstreaming of AI tools in everyday life.

The continued growth of AI will be supported by the physical expansion of data centres and the increased demand for hardware capable of handling AI's vast data processing needs. This translates into higher demand for specialty materials that make up critical electronic components. As data centres require more energy-efficient solutions to process increasing data volumes, materials like gallium nitride (GaN) and indium phosphide (InP) will play a central role.

Gallium Nitride (GaN) and Indium Phosphide (InP) Boosted by AI Expansion

As AI technologies scale, the energy demands of data centres will rise significantly. According to research from Goldman Sachs, the data centre expansion needed to support AI could increase electricity consumption by up to 160% by 2030. This will likely spur greater demand for GaN-based power electronics, which are more energy-efficient than traditional silicon electronics. GaN-based devices generate less heat and can operate at higher temperatures, making them ideal for data centres where cooling accounts for up to 40% of energy consumption.

Another compound semiconductor, indium phosphide (InP), is expected to gain traction as well. InP is already used in data and telecom transceivers and is poised to play a key role in the future of 6G wireless and satellite communications networks. InP-based photonic integrated circuits enable faster, more energy-efficient data transfers, making them essential for the high-speed data transfers required by AI clusters in data centres. This has garnered attention from the U.S. government, with the CHIPS Act supporting multiple InP-related projects this year.

Wider Electronics Demand Faces Challenges

Despite the promising outlook for AI-driven growth in specific sectors, the broader semiconductor market is still grappling with weaker-than-expected recovery. Materion, a U.S.-based producer of specialty materials for electronics, reported slower-than-expected semiconductor recovery in its third-quarter results. The company, which manufactures materials for chip manufacturing, including tantalum sputtering targets and antimony chemicals, noted that while there is strong demand for high-performance chips used in computing, the market for 2025 remains uncertain.

The situation was mirrored by ASML, a major chip equipment manufacturer, which lowered its revenue forecast for 2025 from €30-40 billion to €30-35 billion. ASML highlighted that semiconductor manufacturers are curbing capacity expansions due to the ongoing weakness in chip demand recovery.

Semiconductor Shipments and Market Outlook

The global semiconductor industry witnessed a peak in silicon wafer shipments in 2022, driven by supply shortages and high demand for consumer electronics during the pandemic. However, shipments of silicon wafers—a key indicator of chip production—are expected to drop from 14,565 million square inches (MSI) in 2022 to 12,174 MSI in 2024. Although global silicon wafer shipments are projected to rise to 13,328 MSI in 2025, the recovery expected in 2024 has largely failed to materialize, indicating continued challenges in the broader electronics market.

Conclusion

The demand for electronic metals, particularly those used in AI and data centre technologies, is on the rise. However, the semiconductor sector as a whole is still experiencing a slow recovery, with uncertainty surrounding the broader electronics market heading into 2025. While AI's growth continues to offer opportunities for companies involved in the production of GaN and InP-based components, the overall demand picture for electronics remains mixed, with slower-than-expected recovery from the pandemic-induced boom.

US Expands Indium Phosphide (InP) Manufacturing Capacity Amid Growing Demand and Supply Chain Challenges

Indium Phosphide (InP)

The US is ramping up indium phosphide (InP) production capacity through private investment and government support to meet increasing demand for optoelectronic devices and secure supply chain resilience in the face of geopolitical tensions.

Indium Phosphide Demand Drives Expansion

US semiconductor and optoelectronic manufacturers are expanding InP production capacity to address a growing supply-demand gap. InP-based technologies, essential for AI infrastructure, data communications, and emerging applications like 6G wireless and quantum technology, are becoming increasingly critical as the demand for data processing and energy-efficient solutions surges.

Geopolitical factors are adding urgency to this expansion. China's restrictions on gallium and germanium exports to the US have spurred American companies to strengthen their domestic supply chains.

Key Investments Underway

1. Coherent:

• $33 million investment under the CHIPS Act to modernize and expand its Sherman, Texas facility.
• Transitioning to 6-inch InP wafer fabrication, enabling 4x device output per wafer to meet high-volume demands.
• Additional plans to construct 6-inch wafer plants in Texas and Järfälla, Sweden.

2. Infinera:

• $93 million federal funding for a new InP photonic IC fabrication facility in San Jose, California, and a test and packaging plant in Bethlehem, Pennsylvania.
• The California facility will expand production capacity 10-fold, while the Pennsylvania plant will support advanced test and packaging for secure communications and emerging technologies.

3. IntelliEPI:

• Received $4.12 million from the Texas Semiconductor Innovation Fund (TSIF) to triple annual wafer production at its Allen, Texas facility.
• Focused on InP and gallium arsenide wafers for optoelectronic and electronic devices.

4. Lumentum:

• Scaling InP optical transceiver and laser production to support cloud computing and AI workloads.
• Investing $74 million in capacity expansions, including at its Thailand manufacturing site, with production capacity fully booked until the end of 2025.

Strengthening Supply Chains and National Security

The new InP production facilities will:

• Enhance energy efficiency for data center communications.
• Secure supply chains for national security agencies, including the Department of Defense and intelligence services.
• Support critical emerging technologies like LiDAR, quantum sensing, and 6G wireless networks.

Federal support, coupled with state initiatives like the Texas Chips Act, underscores the US government's commitment to strengthening its semiconductor and optoelectronics industry.

Yunnan Germanium InP Wafer Capacity Expansion Targets Optical Communications Growth

Yunnan Chihong

Yunnan Germanium InP wafer capacity expansion will strengthen China’s position in compound semiconductor materials used in optical communications, data centres and high-speed laser systems. The company plans to invest 188.56mn yuan, or about $27.4mn, to add a new high-quality indium phosphide single-crystal wafer production line.

The project will add annual capacity of 300,000 wafers on a 4-inch equivalent basis, including 6,000 6-inch wafers. Once completed, Yunnan Germanium InP wafer capacity will reach 450,000 wafers per year on a 4-inch equivalent basis.

Yunnan Germanium InP wafer capacity growth reflects rising demand from high-speed optical modules, laser chips and detector chips. The company said its existing capacity can no longer meet market requirements as downstream customers demand larger wafer sizes and higher quality.

Indium Phosphide Demand Rises With AI and Optical Networks

Indium phosphide wafers are III-V compound semiconductor materials used in laser and detector chip production. These components are essential for high-speed optical modules, data centre interconnects, optical communications equipment and high-power lasers.

Demand has continued to rise as the optical communications market expands. High-speed optical modules have entered large-scale deployment, driven by data centre growth, AI computing infrastructure and faster network transmission requirements.

Yunnan Germanium produced 35,400 pieces of 2-4 inch indium phosphide wafers in the first half of 2025, up 4% from 33,900 pieces a year earlier. The new 18-month expansion project will help the company move beyond current capacity limits.

China Deepens Control Over Indium-Based Semiconductor Materials

The expansion also reinforces China’s role in indium supply. Indium phosphide wafers are a downstream application for indium metal, and China remains the world’s largest indium producer, with combined primary and recycled output of 1,800-1,900t in 2025.

The material also carries strategic trade significance. China placed indium phosphide under its strict dual-use export licensing system in February 2025, reflecting its importance in advanced semiconductor, optical and defense-related technologies.

For Yunnan Germanium, the project adds value beyond upstream germanium and indium exposure. It moves the company deeper into high-end semiconductor materials, where wafer quality, scale and export control positioning can shape competitiveness.

The Metalnomist Commentary

Yunnan Germanium’s expansion shows that minor metals are becoming strategic through their downstream semiconductor applications. Indium phosphide capacity will matter more as AI data centres, optical modules and high-speed communications push demand for advanced compound materials.

US Expands Semiconductor Investments with India Partnership

India Chip

The US government continues to ramp up investments in semiconductor manufacturing both domestically and internationally, with a significant focus on partnerships with allied nations. This week, a major agreement was reached between the US and Indian governments to establish a new semiconductor plant in Kolkata, India. The facility will focus on producing advanced semiconductors, including infrared, gallium nitride (GaN), and silicon carbide (SiC), to support sectors such as national security, next-gen telecommunications, and clean energy.

Strengthening Tech Ties: US-India Collaborations

This venture is a part of a broader collaboration supported by the US Space Force, Bharat Semi, 3rdiTech, and the India Semiconductor Mission. The mission, initiated by India's electronics and IT ministry (MIIT), aims to build a robust semiconductor supply chain, supported by the US Department of Commerce’s International Technology Security and Innovation (ITSI) Fund. The fund itself is a key initiative under the CHIPS and Science Act, designed to bolster US semiconductor production.

In addition to the plant in Kolkata, US-based Analog Devices has also signed a partnership with India's Tata Electronics. Their collaboration focuses on chip production at Tata's planned $11bn manufacturing plant in Gujarat, with a potential $3bn facility for chip assembly and testing in Assam. Furthermore, US manufacturer GlobalFoundries, after acquiring Tagore Technology’s power GaN IP, announced plans to develop a Kolkata Power Centre for GaN technology.

On the domestic front, the US Commerce Department recently awarded Polar Semiconductor up to $123mn to expand its silicon wafer manufacturing in Bloomington, Minnesota. This marks the first allocation under the CHIPS Act for commercial chip production, which has sparked over $400bn in private semiconductor investments and more than $35bn across 16 states.

GlobalFoundries Partners with Finwave to Advance GaN-on-Si Technology for Mobile Devices

Cutting-edge collaboration aims for mass production by 2026

US-based Finwave Semiconductor has secured a deal with GlobalFoundries (GF) to scale its gallium nitride (GaN)-on-silicon (Si) technology for mobile phone power amplifiers. The partnership targets large-scale manufacturing of Finwave’s high-electron mobility transistors (MISHEMTs) at GF's 200mm facility in Burlington, Vermont, with an eye on mass production by early 2026. This collaboration merges Finwave's advanced GaN-on-Si tech with GF’s US-based manufacturing and RF silicon platforms.

GaN-based MISHEMTs outperform CMOS and gallium arsenide (GaAs) devices in power output and energy efficiency, making them ideal for 5G and future 6G applications. The technology promises significant improvements in power density and efficiency for power amplifiers, essential for new high-frequency 5G bands, 6G, and Wi-Fi 7 systems.

GF is also advancing its own 650V GaN products and will soon introduce 100-200V variants. The company plans to modernize its Burlington facility and expand capacity, aided by a US Chips and Science Act grant aimed at boosting domestic semiconductor production. GF's recent acquisition of Tagore Technology’s power GaN IP portfolio underlines its commitment to high-volume manufacturing of power technologies in the US.

Anticipating a rebound in smart mobile device sales in 2024, GF’s CEO Thomas Caulfield highlighted AI-enabled devices as a catalyst for increased demand in efficient power semiconductors, starting in Q4 2024.

Canada adds iron ore to the list of critical raw materials

Iron raw materials

High-quality iron ore is required for the production of environmentally friendly steel and is an integral part of the decarbonization process 

Natural Resources Canada has added high-quality iron ore to the list of critical minerals. This was reported by Mining.com with reference to the Ministry’s data.

The list of critical minerals, which has already reached 34 types of raw materials, also includes phosphorus and silicon.

"These raw materials are integral to a wide range of products that are critical to the energy transition, often in short supply, and critical to Canada’s future economic prosperity," the government said in a statement.

Silicon is used to make chips and semiconductors used in most electronic devices. High-quality iron ore is needed to make environmentally friendly steel and is an integral part of the decarbonization process. Phosphorus is in demand for fertilizers and batteries.

The list of critical minerals was first released in March 2021 as part of Canada’s emissions reduction plan, which aims to reduce Co2 emissions by 40-45% below 2005 levels by 2030 and achieve zero emissions by 2050.

Champion Iron, which owns and operates the Bloom Lake mining complex in Quebec, welcomed the addition of iron ore to the List of Critical Minerals. The company’s mine, on the southern edge of the Labrador Trough, has one of the world’s highest iron ore reserves and can produce iron ore concentrate with an iron content of 67.5%. Champion Iron is working on several modernization projects to increase the iron content of iron ore concentrate to 69%.

As Metalnomist reported earlier, global iron ore exports in January-March 2024 increased by 6% compared to the same period in 2023 – to 376 million tons. In the short term, global iron ore exports will remain high as major global companies maintain their production forecasts.