Mapping US chip supply chain: China accounts for far more than it appears, report says

The SIA report draws a distinction between the country where a supplier is headquartered and the country where the actual components and materials originate. While 95 percent of the approximately US$27 billion in annual spending by American chipmakers on manufacturing equipment and materials goes to companies headquartered in the US, Europe, and Japan, this figure drops to 68 percent when the value is counted by the country of origin.

This difference indicates that even suppliers based in allied nations often source production chains outside their country of domicile. The report specifically highlights China's dominant position in rare earths, which are critical for chipmaking, even as its direct supply of finished equipment or materials to the US remains relatively low.

The findings suggest that assessing the resilience of chip supply chains requires looking beyond immediate supplier relationships. The vulnerabilities are found deeper in upstream global supply chains, where critical inputs can be concentrated in a few geographic sources. Understanding these underlying dependencies is crucial for addressing potential disruptions.