Welcome to the Logistics Liaison, a monthly briefing on the top supply chain issues in wholesale distribution. I’m Vesna Brajkovic, Senior Editor at MDM and a former transportation reporter. Each month, I’ll dive into a logistics/transportation topic and dip into my industry contacts to help break down how it affects your business. This month: semiconductors.
There’s a supply chain surge in the U.S. semiconductor industry, fueled by billions of dollars of investment aimed at boosting domestic chip production.
Intel officials have said the company expects to invest nearly $90 billion in U.S. chip manufacturing by the end of the decade as part of its overall $100+ billion expansion plan. The CHIPS Act will add $7.865 billion to help fund Intel’s investments in Arizona, New Mexico, Ohio and Oregon.
As massive construction projects for semiconductor fabrication plants like this one break ground across the country, I wonder if the ripple effects have the potential to reach more of distribution.
While much of the attention has focused on the chipmakers themselves, an important question remains: Could the building materials and MRO distributors also stand to gain from this influx of capital? As the U.S. looks to unlock its full market potential, suppliers of the materials and services essential to these large-scale developments may find themselves positioned for growth.
I spoke to one Hillsboro, OR-based operations leader who oversees a centralized supply chain team across several different business units, one of which is a national distributor to some of the biggest names in semiconductor production in the U.S., including Intel, TSMC and GlobalFoundries. From that conversation, I learned that while breaking into such a technical and complex industry isn’t the easiest road, there may be room for more players.
Scale of Construction and Investment in the U.S. Semiconductor Industry
Let’s get a lay of the land and understand the magnitude of investment. To date, CHIPS for America has administered funds to 47 projects across the country, with plans for more. As of Jan. 30, 2025, the largest billion-dollar investments include:
Intel —
- $3.94 billion (AZ): To construct two logic fabs and modernize an existing fab to increase logic capacity in Chandler, AZ.
- $1.86 billion (OR): To expand and modernize technology development facilities that will utilize the world’s first commercial High-NA EUV lithography equipment.
- $1.5 billion (OH): To create a “regional chipmaking ecosystem” anchored by a logic fabrication facility that will produce Intel nodes in New Albany, OH.

TSMC — $6.6 billion (AZ): To support the company’s planned $65 billion investment in the construction of three greenfield fabs in Phoenix, AZ.
Micron —
- $4.6 billion (NY): To support construction of the first two fabs of a four-fab “megafab” focused on DRAM chip production. The fabs will include the largest amount of cleanroom space in the U.S., according to the award details.
- $1.5 billion (ID): To support the development of a high-volume manufacturing fab focused on DRAM chips and co-located with the company’s research and development facility.
Samsung Electronics — $4.745 billion (TX): This funding will be spilt across multiples projects at two locations in Central Texas. In Taylor, TX, the funds will support construction of an “advanced manufacturing ecosystem” that includes two foundry fabs and a R&D lab. In Austin, it will help expand existing facilities to support production of technologies used by aerospace, defense and automotive industries and is tied to a commitment to collaborate with the U.S. Department of Defense.
GlobalFoundries — $1.45 billion (NY): To support construction of a new large-scale fab and expand an existing fab in Malta, NY, which has a strategic agreement with General Motors.
Including the above billion-dollar awards and dozens more million-dollar awards not mentioned here, there are billions of dollars being flowed into building new manufacturing plants and expanding old ones, funding research and development facilities efforts and more. To put it into perspective, the total award dollars allocated by U.S. region as of Jan. 30 are as follows:
- West: $15.39 billion
- Midwest: $2.33 billion
- Northeast: $6.35 billion
- South: $6.39 billion
More than a dozen proposed awards — accounting for the millions of dollars of investment you will eventually read about in the news (and of which I didn’t include in the above calculations) — still await allocation. But even those awards are not the full picture of total U.S. chip investment.
Chip production, R&D and packaging facilities require… a lot. A lot of equipment, a lot of prep and a lot of capital. Listed in this article is a lot of award money, but the CHIPS Act funding highlighted above makes up only a fraction of the investment. There is also investment by the companies themselves. Here is a (now outdated but still helpful) visual from Visual Capitalist that puts it into perspective.
“These enormous costs are ultimately due to the same factor that has steadily driven down the cost of semiconductors: Moore’s Law, the observation that the number of components on an integrated circuit tends to double every two years … The smaller semiconductor components get, the more difficult it is to create the conditions to manufacture them,” wrote Brian Potter in Construction Physics, a Substack supported by the Institute of Progress. Potter is a structural engineer who served as an engineering team manager of construction startup Katerra.
Opportunity for Distributors to Support U.S. Chip Fab
Where there is construction, there are distributors to support that construction.
During the larger-scale construction of these facilities, I see an immediate opportunity for building materials distributors that serve large contractor markets in these investment areas to provide: utility pipes, ductwork, fittings, filters, hoses, compressor systems, HVACR, plumbing, general construction materials and more.
Intel details this is what it takes to build a chip fab:
- multiple 110,000-pound chillers
- 12 million cubic feet of concrete
- 75,000 tons of steel reinforcement
- 35,000 tons of structural steel
- 29 million feet of cable
A semiconductor fabrication plant is a complex structure, with meeting rooms, cleanrooms, laboratories, and “an intricate infrastructure of ancillary environments housing regulatory, production and delivery systems for the different services and utilities needed for day-to-day fab operation,” according to MKS Instruments, a manufacturer that primarily serves the semiconductor industry. MKS published this diagram of a factory and its utility connections. The company’s accompanying blog gives an overview of fab utilities, which may help illustrate the needs of this market.

Long after construction is complete on these new and expanded facilities, there may then be an opportunity in the market for MRO distributors that can serve as suppliers for these operations. A distributor like yourself could get on the spec sheet of a growing semiconductor manufacturer. I see an opportunity for distributors to provide support for HVAC systems and other needs of clean rooms, including specialized PPE and safety equipment, for example.
“There is a huge amount of waste out of the semiconductor manufacturing industry, so all of the material that we provide in it gets replaced regularly,” one distributor representative in the semiconductor space told me. “And so, as a fab grows and adds more tools, our MRO business picks up alongside our project business.”
In the Store: MDM’s U.S. MRO Market Trends Report
While opportunity rings, this market is one that is driven largely by manufacturer-owned contracts. The distributor I spoke to described it as a “small world.”
“You have to know the product, and know its use case to support it,” he said. “For somebody to come [into the market] they would have either hire or develop enough knowledge about the fab and the sub fab and all of the interconnecting pieces in order to get into the business.”
But, he also speculated that the landscape may become less complex to enter as manufacturers get tapped out and new manufacturers enter the arena and bring distributors along with them.
“I think the opportunity is to look at the product sets going into semiconductor manufacturing that we're going to run out of,” he added. “What are those things that the global supply chain can't manufacture fast enough? One of them is quarter inch stainless steel tubing.”
“I think the opportunity is to look at ... those things that the global supply chain can't manufacture fast enough. One of them is quarter inch stainless steel tubing.”
Are you a distributor who currently serves a semiconductor production or research facility? Are you located near one of these big construction projects? I would love to hear your business perspective at [email protected].
Book Recommendation from the Editor: Since the inception of the semiconductor in the U.S., the history of the technology and its production has been a complicated (and politically charged) one. The fight to keep, take back and reshore the technology is well-chronicled in the 2022 book Chip Wars by Chris Miller. I recommend it for anyone looking to get a lay of the land, an introduction to the major players and a deep dive into why it all went away, just to try to come back again.
Stat Check
This section of MDM’s Logistics Liaison includes key indicators which together help gauge the health of the supply chain. Why these stats? Have another indicator related to transportation and logistics on your radar? Contact [email protected].
🚛 Trucking: Less challenging freight rates improved FTR’s Trucking Conditions Index, pushing it further into the positive in November 2024 (3.02), up from 0.49 in October.
🚂 Rail: Robust consumer spending and higher port activity led to one of the strongest months for intermodal traffic, propping up rail activity while an ongoing manufacturing slump drug down carloads. AAR’s Freight Rail Index in December 2024 rose 2.2%, reaching the highest point since January 2021.
🚢 Ports: Drewry’s North American Container Port Throughput Index rose 3.2% MoM to 116.4 points in November 2024. NRF’s Global Port Tracker logged 2.17 million TEUs in November 2024, down 3.2% from October but up 14.7% YoY.
📦 Freight: The shipments component of the Cass Freight Index declined 7.3% in December 2024, over half of which was seasonal. Seasonally adjusted, YoY shipments declined 6.5% in December, the largest decline since January 2024.
🏭 Manufacturing: ISM’s Manufacturing PMI contracted in December 2024 for the ninth consecutive month. Seven industries reported growth in the month: primary metals; electrical equipment, appliances and components; wood products; furniture; paper products; miscellaneous manufacturing; and plastics and rubber products.