Global semiconductor supply chain: a national competitiveness analysis

The global semiconductor supply chain (SC) is both a pillar of the world economy and a focal point in the intensifying technological rivalry between China and the United States. This study examines its spatial configuration, specialisation patterns and the extent to which strategic competition is reshaping its structure and dynamics. Drawing on strategic trade theory, we propose a two-dimensional 'technology–market' framework and a three-dimensional 'support–suppress–reshape' policy lens to interpret the actions of both countries. Our analysis shows, first, that the semiconductor SC features pronounced specialisation: highly concentrated upstream segments and a fragmented downstream landscape. The US retains strong dominance upstream, while competition in midstream activities is gathering pace. Mainland China, by contrast, has cultivated advantages downstream. Second, the US is reinforcing its technological lead through the CHIPS and Science Act, domestic R&D subsidies and allied coordination to impose technology embargoes and market exclusion measures against China. In response, China is narrowing its technological gaps via the National Integrated Circuit Industry Development Fund, wide-ranging tax incentives across the SC and demand-side tools such as localised procurement, while using initiatives like the Belt and Road to expand in emerging markets. Finally, security concerns are accelerating SC regionalisation and deepening Sino–US technological decoupling.