Addressing semiconductor production challenges
Crucially, the review underscores the urgency of tackling semiconductor supply chain risks.
According to the Congressional Research Service, East Asia accounts for the overwhelming majority (>90%) of advanced semiconductor production, with Taiwan Semiconductor Manufacturing Company (TSMC) alone responsible for more than half.
US market share in semiconductor manufacturing has plummeted from 37% in 1990 to just 12% in 2020, according to the Semiconductor Industry Association. The CHIPS Act seeks to reverse this decline and bolster domestic capacity.
Analysis by McKinsey & Company indicates that supply chain diversification could reduce reliance on high-risk regions by 25%, though significant investment and coordination are necessary. Similarly, experts at the Peterson Institute for International Economics stress the importance of policy alignment, infrastructure improvements and workforce training to ensure successful reshoring efforts.
The DOC plans to continue refining its approach to supply chain resilience, with policies aimed at fostering long-term stability. While the effectiveness of these initiatives remains to be seen, the administration stresses its commitment to collaboration and innovation.
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