What you need to know about semiconductor manufacturing

More than a century ago, the semiconductor was a simple transistor discovered in a lab. Since then, it has ridden the wave of technological advancements and is now ranked as the fourth largest traded product in the world, following crude oil, refined oil, and automobiles. The global market for semiconductors sees frequent cross-border trade and substantial investment efforts on a daily basis. This highlights the critical role of semiconductors in driving economic growth and advancing technology on a global scale, particularly in light of ongoing political and economic challenges. Most recently, tensions between two influential countries (China and the United States) have caused turmoil in an important region of the semiconductor supply chain (Taiwan Province).

Hence, the matter of establishing local semiconductor manufacturing capabilities, attracting foreign direct investment in the industry, and promoting free trade within its supply chain has become a crucial concern for national security. However, this does not imply that the global semiconductor supply chain management system will be eliminated entirely. Estimates suggest that shifting from integrated global supply chains to self-sufficient regional ones would cost at least $1 trillion and result in a 35-65% increase in semiconductor prices. This, in turn, would significantly raise the production cost of electronic information equipment for end users.