2024 Meridian Summit: The Global Stakes of Semiconductor Supply Chains
The current and future state of the semiconductor supply chain is a critical battleground in global geopolitics. As tensions rise between the U.S. and China over semiconductor technology, both nations have implemented strategic export controls, aiming to safeguard their technological advantages. Against this backdrop, diversifying and securing semiconductor sources emerges as a global priority. Hooman Shahidi, Co-founder and CEO of EVPassport, emphasizes the pressing need for the U.S. and its allies to rethink their approach to semiconductor production and global partnerships. “Securing semiconductor supply chains is not just about economic stability; it’s about maintaining technological leadership and national security in an increasingly interconnected world.”
Key Takeaways
The U.S. has fallen behind in semiconductor production, from manufacturing 37% of global chips in 1990 to just 12% today. Shahidi highlighted that the current semiconductor crisis is more about business innovation than product innovation. "We’re incredibly behind,” he remarked, stressing the need for collaboration, both within the U.S. and with international partners, to spur innovation and rebuild supply chains. Mahnaz Khan, Vice President of Policy for Critical Supply Chains at Silverado Policy Accelerator, noted that the current semiconductor supply chain relies heavily on a limited number of suppliers and regions, which increases the risk of disruptions. As rare earth minerals and semiconductor processing technologies become the next front in the geopolitical struggle, regions like South America and Africa, with abundant resources and emerging tech-savvy workforces, must be considered potential allies in new strategies for building more resilient supply chains.
Governance and regulatory frameworks are also crucial in creating a more agile, effective supply chain. Shahidi underscored the need for stable governance in countries that could host new semiconductor manufacturing facilities, warning that without stability, private sector investment is unlikely. Addressing these vulnerabilities to better withstand geopolitical pressures and market fluctuations requires a concerted global collaboration across government, academia, and industry. This will be key to overcoming China’s dominance in processing and refining capabilities.
Next Steps
The action items for policymakers and industry leaders are clear. The U.S. must prioritize creating a global ecosystem that reduces dependency on China for critical resources, fostering partnerships in regions like Africa and South America to increase manufacturing capacity and stabilize supply chains. As Shahidi put it, "business is the greatest platform for change," and the private sector must step up to lead this transformation. Backed by strategic government investments and incentives, industry can promote research and development while supporting the growth of the semiconductor supply chain to ensure long-term stability. Only by redefining global semiconductor alliances and focusing on innovation can the U.S. and its allies hope to regain leadership in this pivotal industry.
Project summary
| 2024 Meridian Summit: The Global Stakes of Semiconductor Supply Chains | October 2024 | |
|---|---|
| Impact Areas: | Business and Trade, Science and Technology |
| Program Areas: | Diplomatic Engagement |
