DelMorgan & Co.’s Analysis of the U.S. Manufacturing Rebuild: Reindustrialization, Onshoring and the CHIPS Act

Following decades of offshoring and supply chain globalization, the U.S. is undergoing a quiet but powerful reindustrialization. In 2025, manufacturing output is at a 15-year high, supported by massive federal investment, geopolitical realignment and a growing private sector push to “make more in America.” While trade dynamics and tariffs remain influential, the focus is now shifting toward domestic production capacity, supply chain dynamics, workforce development and long-term industrial resilience.

Goldman Sachs estimates that real U.S. manufacturing construction spending has more than doubled since 2021, with cumulative investment in manufacturing facilities exceeding $300 billion through Q1 2025. Much of this has been concentrated in sectors deemed strategically vital – semiconductors, electric vehicles (EVs), batteries and renewable energy – fueled by legislation such as the CHIPS and Science Act and the Inflation Reduction Act (IRA).

Catalysts Behind the Shift

At the heart of the U.S. manufacturing resurgence is a coordinated policy effort designed to re-anchor production domestically. The $52 billion CHIPS Act, passed in 2022, provides direct funding for U.S. semiconductor manufacturing and R&D, including $39 billion in incentives for fab construction. Complementing this, the IRA allocates nearly $370 billion toward clean energy initiatives, with significant downstream impact on domestic manufacturing of solar panels, wind turbines and EV components.

Private industry has responded. According to UBS’s Year Ahead 2025, over 80% of new battery capacity planned globally through 2030 includes U.S. projects – a stark contrast to prior years when Asia dominated. Intel, TSMC and Micron have collectively committed more than $100 billion to chip manufacturing facilities across Arizona, Ohio and New York. Similarly, Ford and Tesla continue to expand U.S.-based EV and battery facilities.

Labor markets are also responding. J.P. Morgan notes that job creation in advanced manufacturing categories (semiconductors, energy and high-tech equipment) has grown at an annualized rate of 4.2% since mid-2023, more than double the pre-pandemic trend.

Tailwinds: Geopolitics, Policy and Private Capital

Geopolitical instability and supply chain bottlenecks during COVID-19 sparked renewed urgency around industrial self-sufficiency. The U.S.-China strategic competition – now further strained by tariff increases on EVs, solar panels and steel imports – has made reshoring both an economic and national security priority.

Bank of America’s 2025 Economic Outlook underscores this shift: “The U.S. is moving from decades of globalization toward a regionalized model – driven by reliability, not cost.” In 2024 alone, U.S. manufacturing construction saw a 17% YoY increase, with federal grants, state incentives and tax credits acting as accelerants.

Public sentiment is also supportive. A January 2025 Pew Research poll found that 72% of Americans favor reshoring policies even if they result in higher consumer prices – a reflection of both security- and job-based priorities.

Headwinds: Labor, Logistics and Inflation

Despite the momentum, the rebuild faces challenges. A vital one among them is labor. Morgan Stanley’s Key Themes for 2025 points out that the U.S. currently lacks the skilled workforce needed to operate many of the new facilities that are coming online. The Semiconductor Industry Association estimates that the U.S. will face a shortage of 90,000 technicians and engineers by 2030 if current training levels persist.

Logistical infrastructure also remains a bottleneck. While plant construction is booming, the supporting transportation, grid and water systems needed to operate them at scale are lagging. Inflation in construction materials, though stabilizing, still runs at 4-6% YoY, pressuring margins on long-cycle capital projects.

Investment Outlook

From an investment perspective, the U.S. manufacturing rebuild presents long-term upside across many sectors, including industrial real estate, logistics, automation and specialty finance. As UBS notes, “Investors should focus on nodes within the manufacturing value chain – engineering services, automation software, EV battery materials – that benefit regardless of macro volatility.”

In sum, the U.S. is not returning to its 1950s manufacturing model – it is building a next-generation one, deeply integrated with energy policy, AI and global strategy. While challenges remain, the structural shift is unmistakable: for the foreseeable future, production will be coming home.

About DelMorgan & Co.

DelMorgan & Co. is a leading global investment bank headquartered in Santa Monica, in the greater Los Angeles area of Southern California. With over $300 billion of successful transactions in over 80 countries, DelMorgan‘s Investment Banking professionals have worked on some of the most challenging, most rewarding and highest profile transactions in the U.S. and around the globe.