Semiconductor production is highly complex, with more than a thousand processes taking place throughout the design, fabrication, assembly, testing and packaging phases. These phases in turn rely on an intricate global ecosystem of suppliers of inputs from chemicals to software tools: for example, up to 500 specialty chemicals are needed to produce some integrated circuits.

Some of these inputs and stages of the semiconductor production process are carried out by a small number of companies and economies. Any disruptions to a particular input, company, or economy –or the trade flows that link them – can disrupt semiconductor supply, as well as the downstream products that require them.

Understanding the semiconductor value chain can help policymakers identify potential bottlenecks and make better policies to strengthen resilience. In this context, sectoral data are not granular enough to reflect the variety of non-substitutable semiconductor products. Therefore, they tend to underestimate the concentration of supply for certain type of chips, and do not allow policymakers to identify the segments of products and the production steps that are prone to disruptions. However, more granular data accounting for the diversity of chip types and the various production steps are scarce and seldom comparable.

The OECD Semiconductor Informal Exchange Network brings together policymakers and other stakeholders to shed light on semiconductor value chains, including by sharing production capacity data consistent with a common taxonomy. 

Semiconductor production is high-tech, requiring highly skilled and specialised engineers. The limited global supply of skilled labour may hinder efforts to ramp up the supply of chips to meet the increasing demand resulting from advanced technologies such as artificial intelligence and quantum computing, as well as the continued digital transformation. Working together with education and academia, efforts to develop and train key skills, including through a renewed focus on STEM disciplines for both girls and boys, would help ensure the chips workforce of the future and a sustainable semiconductor supply.