Global Semiconductor Supply Chain Analysis – Oil Analogy and Venture Opportunities
1. Supply Chain Mapping
Physical & Network Structure
Raw Materials: High-purity silicon, specialty gases (70% of neon from Ukraine/Russia pre-2022), photoresists, chemicals.
Processing/Refining: Shin-Etsu, Sumco (Japan) for wafers; Linde, Air Products for gases.
Core Manufacturing: Leading-edge fabrication dominated by TSMC (~92% of <10nm capacity) and Samsung. Memory: Samsung, SK Hynix, Micron (~95% of DRAM).
Assembly/Test (OSAT): 80%+ of top providers in East Asia/US. ASE (Taiwan), Amkor (US), JCET (China).
Distribution: Arrow, Avnet as authorized distributors.
Network Topology
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Multi-tier, global structure with hub-and-spoke characteristics
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ASML: sole supplier of EUV lithography machines
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ARM: provides CPU core designs for most mobile chips
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Serially dependent — delay at one step halts all downstream
Concentration & Fragility
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Top 3 contract foundries control 80%+ of global capacity (TSMC alone ~55%)
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Taiwan is a geographic bottleneck and geopolitical risk
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ASML is single-source failure point for EUV
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EDA software: 3 US firms (Synopsys, Cadence, Siemens/Mentor) control ~80-90%
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Analogous to oil’s “chokepoints” (Strait of Hormuz) but corporate/technical rather than geographic
Geographic Distribution
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Raw materials: mining often in China/Asia; silicon wafer production in Japan, Taiwan, Germany
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Fabrication: Taiwan (~20% of global, >90% of most advanced), South Korea (memory), China (mostly older nodes), US (~12%)
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Assembly: Taiwan, China, Malaysia, Vietnam
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Distribution: Global, US-headquartered majors
Source: Local file — Project-TBD/Research/Global Semiconductor Supply Chain Analysis – Oil Analogy and Venture Opportunities.pdf