About 75% of semiconductor manufacturing capacity, as well as many suppliers of key materials—such as silicon wafers, photoresist, and other specialty chemicals—are concentrated in China/East Asia, a region significantly exposed to high seismic activity and geopolitical tensions. All of the world’s most advanced semiconductor manufacturing capacity—in nodes below 10 nanometers—is currently located in South Korea (8%) and Taiwan (92%).
These are single points of failure that could be disrupted by natural disasters, infrastructure shutdowns, or international conflicts, and may cause severe interruptions in the supply of chips. If Taiwan were unable to make chips for a year, it would cost the global electronics industry almost half a trillion dollars in revenue, the report found: “The global electronics supply chain would come to a halt.”
Related: The Chip Wars of the 21st Century - by Steve Blank