The COVID pandemic exposed vulnerabilities in global supply chains, prompting a push by governments, including the U.S., to reshore semiconductor manufacturing. Semiconductors are critical for modern technology, and increasing domestic production aims to stabilize supply chains amid rising demand, especially for high-end chips driven by AI. However, the cultural and historical contexts of successful semiconductor industries in places like South Korea and Taiwan highlight challenges. A nuanced ecosystem focusing on specialization and cooperation is essential for building effective domestic manufacturing capabilities.
"People miss the cultural aspect of this," Nigel Toon, CEO and chairman of U.K. semiconductor firm Graphcore, said. "Why are the most advanced semiconductors built in Korea, in Taiwan, in Japan?"
Toon credits the move to outsource key parts of the semiconductor industry in the '90s and '00s, creating an opportunity for firms to specialize in key parts of the chip ecosystem.
Even as governments now focus on building their own semiconductor manufacturing capability, Toon said there had to be a system "where people can say 'I own this critical piece'," while still allowing different economies to work together.
Will Abbey, vice president and chief commercial officer for Arm, agreed that the rising importance of semiconductors is forcing a rethink on investments.
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