SIA Report Highlights Vulnerabilities in US Chip Supply Chains Related to China's Rare Earth Control
The Semiconductor Industry Association (SIA) stated that US chip manufacturing depends on 'vulnerable inputs hidden deep in upstream global supply chains,' noting that while China supplies a small percentage of direct equipment and materials, it maintains a dominant position in critical rare earth elements.
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Based on reporting by South China Morning Post:
According to the Semiconductor Industry Association (SIA) in a report published on Friday, US chip production is dependent on 'vulnerable inputs hidden deep in upstream global supply chains.'
While China is responsible for approximately 5 per cent of the equipment and materials directly provided to the US chip industry when assessed by the country of manufacture, the SIA indicated that China controls over 90 per cent of certain rare earths essential for chipmaking.
Furthermore, the SIA reported that although 95 per cent of the nearly US$27 billion yearly expenditure by American chipmakers on manufacturing equipment and materials originated from companies based in the US, Europe, and Japan, this percentage decreased to 68 per cent when the value was calculated based on the country of origin. The SIA noted that suppliers frequently depend on production chains located outside of their home country.
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