U.S. Exposure to the Taiwanese Semiconductor Industry
Year: 2025
Type: article
Abstract: In this paper, we measure U.S. exposure to the Taiwanese semiconductor industry and estimate the price and quantity effect from a hypothetical semiconductor manufacturing disruption in Taiwan. This work provides insights on the level of U.S. vulnerability in terms of relying on Taiwan-manufactured semiconductors for downstream manufacturing. Using a supply chain tracing technique with information derived from trade and industry statistics, we measure U.S. exposure by estimating Taiwanese semiconductors imported into the United States directly from Taiwan and via third countries. With a partial equilibrium (PE) segmented model of trade and production, we simulate the effect of U.S. semiconductor prices and domestic production quantities to a hypothetical Taiwan shock with a range of magnitudes. We estimate that, at the segment level, about 44.2 percent of U.S. imports of logic chips were manufactured in Taiwan, compared to 24.4 percent of memory chips and 1.0 percent of analog chips. In a hypothetical scenario of a major manufacturing disruption in Taiwan, we find that the U.S. logic chip segment would experience the largest negative impacts, which may lead to as high as a 59 percent increase in the price of logic chips that U.S. downstream producers would have to pay. Based on the current estimated capacity constraints in the United States, domestic production of logic chips would increase by as high as about 5 percent, and thus only could partially replace the reduced imports from Taiwan.
DOI: 10.71476/hqta-t760
Authors: Jones, Lin, Krulikowski, Sarah, Lotze, Nathan, Schreiber, Samantha
Institution: United States International Trade Commission
Language: English
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6902636616