Localization of Semiconductor Supply Chains—Driving Forces and Challenges

Tin-Chih Toly Chen
Additional contact information
Tin-Chih Toly Chen: National Yang Ming Chiao Tung University

Chapter Chapter 2 in Supply Chain Localization in the Semiconductor Industry, 2025, pp 23-44 from Springer

Abstract: Abstract This chapter first examines the stability of a semiconductor supply chain based on two theories: the triple bottom line and the multi-generational philosophy. The sustainability of a semiconductor supply chain is clearly integral to its stability. To pursue the sustainability of a semiconductor supply chain, localization is considered a tactical strategy for foundries. The current localization trend is then compared to the traditional one to show its uniqueness. Subsequently, various forces driving the localization of semiconductor supply chains were identified as the U.S.-China trade war, geopolitics, the coronavirus disease 2019 (COVID-19) pandemic, the Ukraine-Russia war, environmental awareness, and the need for semiconductor supply chain transparency. The impact of each driving force is then described individually. In addition, several challenges that need to be overcome in the localization of semiconductor supply chains are also listed, including different laws, cultural differences, insufficient local human resources, uncertain local government subsidies, competition from local competitors, and higher wage levels. The procedure for semiconductor supply chain localization is subsequently established as an iterative process consisting of two parallel parts. Finally, possible future developments in semiconductor supply chain localization are discussed, with the impact of generative artificial intelligence (GenAI) and 3D packaging (e.g., chip-on-wafer-on-substrate, CoWoS) being also mentioned.

Keywords: Localization; Semiconductor supply chain; Driving force; Generative AI; Geopolitics (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-81280-4_2

Ordering information: This item can be ordered from
http://www.springer.com/9783031812804

DOI: 10.1007/978-3-031-81280-4_2

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().