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

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.

China’s share rose to 5 per cent by production site from about 1 per cent by supplier headquarters, while Southeast Asia’s jumped to 10 per cent from less than 1 per cent, it said.