The US semiconductor supply chain relies heavily on non-US markets and suppliers for a host of activities related to manufacturing. This includes material inputs, wafer fabrication, assembly, packing and testing, and advanced equipment for manufacturing state-of-the-art (SOTA) chips. Intel alone relies on over 16,000 different suppliers. While Europe accounts for only 10 percent of the global semiconductor supply chain, the US and European semiconductor industries and supply chains are tightly intertwined.

Key Points

• US and European semiconductor industries and supply chains are tightly intertwined.
• Currently, the US Defense Microelectronics Activity’s (DMEA) list of accredited, trusted semiconductor suppliers encompasses US-based suppliers with few exceptions for foreign firms like the British BAE Systems that are already tightly integrated into the defense industrial base.
• Several opportunities exist for the US and Europe to coordinate more closely on investments, supply chain standards, and markets for secure and trusted chips.
• However, a mutual reliance on East Asian suppliers and diverging national security views on China pose challenges to expanding US trusted semiconductor status to in European producers and markets.

Dr. Jason Blessing is a Research Fellow at the Potomac Institute for Policy Studies. His research expertise focuses on cybersecurity, defense, and international relations.