Germany-based semiconductor manufacturer X-Fab has announced that it is expanding the operations of its foundry in the city of Lubbock, in the US state of Texas.

The company, which has operated in Lubbock for more than 20 years, has invested $200m (€184.8m) to increase production of silicon carbide semiconductors at the site. Its products are critical components for the automotive, medical and consumer industries.

The expansion will create an additional 250 jobs in Lubbock. X-Fab has said it expects the market for silicon carbide to increase by 35% over the next decade and has predicted future expansions to meet demand.

The Covid-19 pandemic created a severe global chip shortage in 2021, prompting major economies to prioritise their onshore capacity for semiconductor manufacturing. Asia-Pacific has dominated the production of semi-conductors, with China having a near monopoly on silicon production, and Taiwan and South Korea by far the leading countries for advanced manufacturing.

The US has sought to challenge this Asian dominance by incentivising greater domestic production. As part of the Chips and Science Act, the US has banned tech companies from building chip factories in China. This move has added to ever-rising geopolitical tensions between Washington and Beijing.

In April 2023, German science and technology company Merck announced plans to develop a speciality gas plant in Pennsylvania, with the gas produced used to support the development of the company’s semiconductor business.