The US administration will investigate the semiconductor supply chain as part of national security assessments.

This initiative aims to identify potential vulnerabilities in critical technology sectors.

President Donald Trump announced the upcoming investigations on April 11, 2025.

The focus will be on addressing risks that could impact the supply of essential electronic components.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ U.S. semiconductor interventions follow decades-long pattern of national security concerns

Trump’s announcement continues a historical pattern of U.S. government intervention in the semiconductor industry that dates back to the 1970s-80s, when America first faced significant foreign competition.

In 1986, the U.S. established the U.S.-Japan Semiconductor Agreement to address Japanese dominance after America’s market share declined from 60% in the early 1970s to just 35% by 19891.

The U.S. later created SEMATECH in the late 1980s specifically to counter Japanese semiconductor dominance, overcoming initial resistance to government involvement by framing it as a national security necessity2.

Today’s concerns mirror this history but with different competitors, as U.S. domestic manufacturing capacity has fallen from 37% of global production in 1990 to just 12% today3.

2️⃣ Geographic concentration creates national security vulnerabilities

The concentration of advanced semiconductor manufacturing in East Asia presents significant national security risks that justify Biden’s investigation focus.

Taiwan alone accounts for 44.2% of U.S. imports of sophisticated logic chips and produces 94% of the world’s most advanced logic chips, creating a critical vulnerability given regional geopolitical tensions56.

The global semiconductor supply chain involves over 500 production stages crossing more than 70 international borders, making it particularly vulnerable to disruption7.

Past events have demonstrated how semiconductor supply disruptions can impact the broader economy, as seen when a 1999 earthquake in Taiwan caused semiconductor prices to spike rapidly3.