The global chip supply chain is becoming increasingly vulnerable to massive disruption, according to a new study.

 

Since manufacturers have become more concentrated in distinct areas, the global semiconductor supply chain has become highly susceptible to natural disasters and geopolitical disturbances, according to a recent report from a US industry association.

The news comes amid a global chip shortage that began late last year with overcrowded factories in Taiwan but has since been worsened by a fire at a Japanese factory, a freeze that knocked out power in Texas, and a worsening drought in Taiwan this year. Some production lines at car plants in the United States, Europe, and Asia have been idled as a result of the shortage.

Modern chip production entails over a thousand steps and necessitates the use of complex intellectual property, materials, and chemicals sourced from all over the world. However, the Semiconductor Industry Group, which represents the majority of US chipmakers, reported on Thursday that it discovered more than 50 places in the supply chain where a single region has a market share of more than 65 percent.