The CHIPS Act, launched in 2022 under the Biden administration, was designed to accelerate reshoring by channelling $280 billion into domestic semiconductor production. It marked a major effort to rebuild the United States’ manufacturing base and reduce reliance on overseas supply chains.

Under the Trump administration, the policy shifted significantly. Intel was initially promised CHIPS Act funding in March 2024 to expand domestic manufacturing capacity. However, by August 2025, access to those funds became contingent on the US government receiving a 10 per cent equity stake in the company. This shift, positioning the federal government as a direct shareholder, represents a significant departure from traditional subsidy-based industrial policy. Manufacturers now weigh financial incentives against political involvement, softening the long-term outlook for US semiconductor expansion.

Semiconductor investment is a critical driver for industrial automation and motion control. Changes to major subsidy programmes influence the timing, scale and certainty of semiconductor equipment spending. Each new fabrication facility represents a substantial investment in motion control systems, given the high level of precision required. When fab projects slow or stall, motion control suppliers feel the impact quickly. Prior to policy changes, US semiconductor and electronics machinery revenue within the motion controls market was forecast to grow strongly through 2029. Revised projections now indicate slower expansion as uncertainty dampens investment.

Global policy and competition

International strategies contrast sharply with the US approach.

The European Chips Act, backed by €43 billion in public and private funding, emphasises coordination over control. It supports cross-border R&D initiatives and state-aid flexibility that allows member nations to fund semiconductor fabs. Crucially, it does so without direct ownership or political intervention. The result is a more predictable, collaborative environment that has attracted significant foreign interest, including from US and Asian firms. In Asia, Japan’s Chip Strategy and South Korea’s K-Chips Act follow similar patterns.

Both emphasise long-term stability, tax incentives and clear separation between government support and corporate governance. When contrasted with these partnership-driven models, the US approach appears increasingly interventionist. The conversion of CHIPS funding into government equity has raised new questions about the boundary between public subsidy and state control. For investors and manufacturers evaluating long-term commitments, clarity and consistency are now as important as the incentives.

Regional investment choices for suppliers within the motion controls and automation ecosystem are becoming increasingly important. Regions offering transparent, partnership-based subsidy programmes are likely to capture a larger share of motion control demand tied to semiconductor expansion. This is reflected in the CAGR for countries with more transparent policies. South Korea, Taiwan and Japan are expected to grow revenue at 2.5 per cent, 5.5 per cent and 5.0 per cent respectively from 2023 to 2029.

Impact on motion controls

The motion controls market in the US is projected to see strong growth over the next decade, driven largely by semiconductor investment. In the US, the semiconductor and electronics sector revenue is expected to grow at a 6.3 per cent CAGR from 2023 to 2029, compared with 3.5 per cent overall market growth, making it the second-fastest-growing industry in the country. However, as federal policy in the US shifts, there is legitimate concern that the previously anticipated growth from the semiconductor sector could be undermined.

Source: Interact Analysis

This growth projection for the semiconductor & electronics machinery industry was prior to the Intel announcement. It demonstrates how the United States semiconductor market was on track to outpace overall Motion Control growth in the US.

What’s next?

If this trend continues, its possible semiconductor manufacturers will prioritise production expansion in other regions. Regions that successfully attract these redirected investments from the United States could see a sharper uptick in demand for motion controls over the next decade. Europe, Japan and South Korea are emerging as preferred alternatives for semiconductor expansion, thanks to transparent subsidy structures and predictable long-term policy. For the US, the risk lies not in losing capacity, but in ceding momentum. If investors and suppliers perceive the US market as unpredictable, they will redirect resources to regions where industrial policy is stable and transparent. This could have long-term implications for the global motion control landscape.

About the author:

Clara Sipes is a Market Analyst specializing in the Industrial Automation sector. With a degree in International Business and a minor in Risk Management from the McCombs School of Business at the University of Texas at Austin, Clara leverages a strong academic background and analytical skills to drive insights and strategies in the industry.