SIA Report: China's Hidden Grip on US Chip Supply Chain Exceeds Direct Trade Figures

China's role in supplying the US semiconductor industry is far larger than direct trade data suggests, according to a report released Friday by the Semiconductor Industry Association (SIA). Measured by country of manufacture, China provides roughly 5 per cent of the equipment and materials shipped directly to American chipmakers. However, its control over specific rare earths essential to chipmaking exceeds 90 per cent. The SIA found that 95 per cent of the nearly US$27 billion spent annually by US chipmakers on manufacturing equipment and materials came from companies headquartered in the United States, Europe, and Japan. When that same spending is calculated by country of origin, the share falls to 68 per cent. The association attributed the gap to suppliers that "often rely on production chains outside their country of domicile." The report describes US chip production as dependent on "vulnerable inputs hidden deep in upstream global supply chains." The findings point to exposure that conventional trade statistics obscure, since corporate headquarters location does not reflect where components are actually made. The SIA published the report on Friday.