LOS ANGELES >> Before “America First” became the Trump administration’s mandate for foreign policy and trade, one sector was already working to bring business back to the United States: the semiconductor industry.

Aided by government incentives, American and foreign tech companies alike have invested hundreds of billions of dollars to bolstering semiconductor operations — research and development, manufacturing and facility modernization — across the country in recent years.

In few places is the growth of the U.S. semiconductor industry clearer than in the Greater Sacramento region, where tech leaders and lawmakers have, for years, sought to grow California’s role in producing the chips that power everyday necessities like cars, refrigerators and smartphones. Semiconductor giants clustered in cities just outside Silicon Valley — Intel, AMD, Bosch, Samsung and Micron — are building on a tech foothold Intel first established when it opened its Sacramento-County campus in 1984.

But President Donald Trump’s economic policies have complicated that growth as the administration takes its next steps toward imposing more tariffs on key imports and launching investigations into imports of computer chips and chip-making equipment — all at a time when deeper semiconductor investments were just starting to have a positive impact on changing supply chains. New tariffs, paired with the administration’s threats against the CHIPS and Science Act, could dramatically slow its goal of ensuring the U.S. maintains a competitive edge in artificial intelligence development.

“You’re starting to see some of it now. Samsung announced a delay in the fabs in Texas,” said Mario Morales, an analyst with the International Data Corp. “That facility was supposed to come online in 2024 now it’s being delayed to 2028. I think some of these companies are delaying it because they now know that they’re not going to likely get funding, or because of the uncertainty around the acts that we’re seeing around the new trade policy.”

When asked about the delay, Samsung said the Texas site will be ready by 2026.

Although the U.S. is a major producer of certain types of semiconductor chips, the nation’s share of global chip production — measured by volume and not dollar value — fell from 37% in 1990 to just 10% in 2022, according to the Semiconductor Industry Association. As a result, the country relies heavily on imports from Taiwan and South Korea for advanced chips.

Major manufacturers like Taiwan Semiconductor Manufacturing Corp. are investing to build up U.S. facilities, partly due to incentives put in place during former President Joe Biden’s time in office. The CHIPS Act, a law passed in 2022 with bipartisan support, was designed to revive U.S. semiconductor manufacturing while sharpening the U.S. edge in military technology and minimizing future supply chain disruptions.

Because of the CHIPS Act, the U.S. is projected to more than triple its semiconductor manufacturing capacity — the highest rate of growth in the world during that period, according to a May 2024 report from the Semiconductor Industry Association and the Boston Consulting Group.

Barry Broome, president of the Greater Sacramento Economic Council, said weaknesses in the semiconductor supply chain became evident during the pandemic, when the U.S. experienced a shortage in supply. It was “abundantly clear that having these chip products offshore in Vietnam, Taiwan, China for cost savings had serious implications.”

Those pandemic-era challenges, paired with looming tensions between China and Taiwan, have helped drive the industry to the Sacramento area, he said. Northern California’s wealth of tech knowledge and established roots in the semiconductor industry are also attractive traits that have brought investment to the Sacramento region as federal subsidies begin to bolster domestic growth.

German tech company Bosch, for example, announced a $1.9 billion investment in the Greater Sacramento area in 2023 to manufacture chips for electric vehicles, converting its facility in Roseville into a silicon carbide semiconductor production site.

That investment, Bosch said, would create as many as 1,700 jobs in construction, manufacturing, engineering, and research and development. The project marks the largest semiconductor investment in California in three decades, according to Broome.

Tech workers who started out at companies like Intel have spun out companies of their own, including Sacramento-area AI startup Blaize and data storage manufacturer Solidigm.

Dinakar Munagala, cofounder of Blaize, said the company’s AI chips are among the few built domestically. Their chips are made in a Samsung foundry in Texas, he said. The company’s products, Munagala added, help to power systems that analyze traffic patterns and detect suspicious behavior in airports.

“We’re built here,” he said. “That’s one of the reasons we’re actually getting quite a bit of interest from defense, border security, these classes of use cases.”