Prepare a Staggering US$1.2 Trillion to Build Semiconductor Supply Chains

semiconductor supply chainClose-up view of a modern GPU card with circuit and colorful lights and details. Source: Adobe Stock

Building fully self-sufficient localized semiconductor supply chains in regions across the globe would cost roughly US$1.2 trillion according to a Boston Consulting Group report.

Although the concentration of up to 75 percent of the chip manufacturing capacity located in East Asia has brought to the world’s attention, building fully self-sufficient local semiconductor supply chains may not be the best solution.

According to the Boston Consulting Group report, constructing fully self-sufficient semiconductor supply chains that operate locally in regions across the globe to cover the chip demands in 2019 would require investing a staggering US$1.2 trillion upfront and an additional recurrent US$125 billion for annual operation.

Approximately 40 percent of the total cost will be dedicated to the manufacturing capacity, which includes wafer fabrication and assembly, packaging, and testing.

With a surge in semiconductor demand brought by the need for electronic gadgets during the pandemic and a shortage of automotive chips, manufacturing appears to be a focal point in the supply chain.

Currently, the world’s most advanced semiconductor in nodes below 10 nm manufacturing capacity is concentrated in South Korea, taking 8 percentage and largely in Taiwan, taking up 92 percent. These are areas prone to seismic damages, experts have therefore been worried about the resilience of the supply chain.

 

 

Source: SIA