Mapping US chip supply chain: China accounts for far more than it appears, report says
China accounts for 5 per cent of equipment and materials supplied to the US chip industry, but holds over 90 per cent grip on rare earths.
Quick Look
China accounts for about 5 per cent of equipment and materials directly supplied to the US chip industry by country of manufacture, but holds over a 90 per cent grip on necessary rare earths, according to the Semiconductor Industry Association.
AI-generated summary
Why It Matters
The Semiconductor Industry Association published a report detailing the origins of equipment and materials used by American chipmakers.
China accounts for about 5 per cent of the equipment and materials directly supplied to the US chip industry when measured by country of manufacture, but its grip on certain rare earths needed for chipmaking is over 90 per cent, according to the Semiconductor Industry Association (SIA).
While 95 per cent of the nearly US$27 billion annual spending by American chipmakers on manufacturing equipment and materials was sourced from companies headquartered in the US, Europe, and Japan, that figure dropped to 68 per cent when the value is counted by country of origin, according to SIA.
Suppliers “often rely on production chains outside their country of domicile”, the SIA said in a report published on Friday.
Open Questions
- What specific rare earths are most vulnerable to export restrictions?
- How quickly can US chipmakers diversify their supply chains?
