The global race to build domestic factories and sever dependency on overseas suppliers for these critical components is spurring a spending boom, and the biggest beneficiaries so far are arguably the chipmakers.

Since the start of the week of June 13, Intel Corp. has made announcements about more than $50 billion in new plants in Poland, Germany and Israel, spurred on by government incentives.

Combined, the U.S., the European Union, Japan and India have committed more than $100 billion in subsidies to attract the likes of Intel, Taiwan Semiconductor Manufacturing Co. and Micron Technology Inc.

For chipmakers, the subsidies represent an important hedge against rising costs while they work to reshape the global manufacturing landscape. For the governments, the plants mean jobs, investment in infrastructure and supply chain security for the semiconductors needed for everything from automotive production and mobile phones to home appliances. Confronted with Russia’s invasion of Ukraine and China’s perennial threat to take over Taiwan by force, they’re betting that more plants in more countries insulates them against disruptions.

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Intel’s biggest layout in Europe will be its €30 billion ($32.8 billion) plant in Germany, where it negotiated a subsidy package valued at about €10 billion.

Intel said its new site in Magdeburg is expected to create 7,000 construction jobs during the initial construction phase, as well as roughly 3,000 permanent high-tech jobs and tens of thousands of additional positions “across the industry ecosystem.”

The German government and Santa Clara, California-based chipmaker originally agreed to subsidies worth €6.8 billion. But the company was able to argue that the cost to build the plant, originally estimated at €17 billion, had ballooned because of technological advances, inflation and higher energy costs. Germany agreed to add another €3 billion in state aid in a package that includes price caps.

STMicroelectronics NV and GlobalFoundries Inc. have gotten about 40% of their costs subsidized via the European Union’s Chips Act, people familiar with the matter have said. TSMC, the world’s biggest contract chipmaker, is in long-running talks with the German government for as much as 50% of its new semiconductor plant in Dresden, on par with what Japan offered the company. The company and its partners may spend as much as €10 billion to build the facility.

TSMC executives have repeatedly talked about higher operating costs with its ongoing diversification push, and, in the most recent annual shareholder meeting, Chairman Mark Liu said the company may face challenges on human resource and labor unions in Germany.

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Still, governments that sink too much into these subsidies risk a backlash from taxpayers still grappling with soaring inflation and rising interest rates. Even TSMC founder Morris Chang has warned that efforts by governments around the world to build domestic chip supply chains could push up costs and yet still fail to achieve self-sufficiency.

When German chipmaker Infineon Technologies AG got €1 billion for its plant in Dresden, Clemens Fuest, the head of Germany’s IFO economic institute, warned that the trade-off of subsidies for homegrown chip production might not make sense.

“My concern is that we are handing out a huge amount of money only to slightly increase security of the supply,” Fuest told German broadcaster ARD in May 2023. “Even if it all works out, we will still be importing 80% of our chips.”