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

• Multi-tier, global structure with hub-and-spoke characteristics
• ASML: sole supplier of EUV lithography machines
• ARM: provides CPU core designs for most mobile chips
• Serially dependent — delay at one step halts all downstream

Concentration & Fragility

• Top 3 contract foundries control 80%+ of global capacity (TSMC alone ~55%)
• Taiwan is a geographic bottleneck and geopolitical risk
• ASML is single-source failure point for EUV
• EDA software: 3 US firms (Synopsys, Cadence, Siemens/Mentor) control ~80-90%
• Analogous to oil’s “chokepoints” (Strait of Hormuz) but corporate/technical rather than geographic

Geographic Distribution

• Raw materials: mining often in China/Asia; silicon wafer production in Japan, Taiwan, Germany
• Fabrication: Taiwan (~20% of global, >90% of most advanced), South Korea (memory), China (mostly older nodes), US (~12%)
• Assembly: Taiwan, China, Malaysia, Vietnam
• Distribution: Global, US-headquartered majors

Source: Local file — Project-TBD/Research/Global Semiconductor Supply Chain Analysis – Oil Analogy and Venture Opportunities.pdf