WASHINGTON, October 12 — The Semiconductor Industry Association (SIA) has released a new report titled ‘Understanding Dependencies in the U.S. Semiconductor Supply Chain,’ highlighting significant vulnerabilities within the nation’s semiconductor ecosystem while proposing a comprehensive four-pronged strategy to address these challenges. The technical reality is that while 95% of semiconductor equipment and materials originate from trusted headquarters, the figure drops to 68% based on actual production locations. This discrepancy exposes substantial global vulnerabilities that could impact U.S. technological capabilities and national security, as outlined in the SIA report.
Nearly one-third of upstream raw materials are classified as high-risk, with heavy concentration in China for critical materials like gallium and tungsten, according to the report. This dependency creates a single point of failure that could be exploited through export controls or geopolitical tensions.
Four-Pronged Strategy
The SIA outlines a multi-faceted approach to reduce these strategic dependencies and build more resilient supply chains with like-minded partners and allies. The strategy focuses on four key areas: expanding domestic production and stockpiles, strengthening allied supply chains, mitigating critical mineral risks, and scaling research and development (R&D) and recycling efforts. To expand domestic production, the SIA recommends accelerating National Institute of Standards and Technology (NIST) CHIPS funding, leveraging Project Vault for strategic reserves, and establishing regional manufacturing clusters, as suggested in the report.
Strengthening allied supply chains involves reducing import friction on specialized inputs and expanding economic corridors like the Luzon Economic Corridor, as proposed in the SIA report. The report also addresses the critical mineral dependency issue by recommending a shift away from materials vulnerable to foreign export controls and pursuing international supplier diversification.
Scaling R&D and recycling efforts represents the fourth pillar of the strategy. The SIA calls for boosting federal R&D spending and utilizing Broad Agency Announcements to transition laboratory prototypes into commercial production more efficiently, as suggested in the report. The SIA emphasizes that shifting and securing supply chains cannot be accomplished overnight.
The platforms, mechanisms, and tools to do so are already in place and just need to be carefully calibrated in collaboration with industry and the research community to support U.S. semiconductor supply chain resilience, as stated in the report. The report was released by the SIA, based in Washington, D.C., and is available for download.
