Semiconductors are highly complex products to design and manufacture. No other industry has the same high level of investment in both R&D (22% of annual final semiconductor sales to electronic device makers) and capital expenditure (26%).

A hypothetical alternative with parallel, fully “self-sufficient” local supply chains in each region to meet its current levels of semiconductor consumption would have required at least about $1 trillion in incremental upfront investment, resulting in a 35% to 65% overall increase in semiconductor prices and ultimately higher costs of electronic devices for end users.
 

Over the next 10 years, the industry will need to invest about $3 trillion just in R&D and capital expenditure globally across the value chain in order to meet the increasing demand for semiconductors. Industry participants and governments must collaborate to continue facilitating worldwide access to markets, technologies, capital, and talent, and make the supply chain more resilient.
 

There are more than 50 points across the supply chain where one region holds over 65% of the global market share, although the level of risk associated with each of these varies. Manufacturing emerges as a major focal point when it comes to the resilience of the global semiconductor supply chain. About 75% of semiconductor manufacturing capacity, as well as many suppliers of key materials—such as silicon wafers, photoresist, and other specialty chemicals—are concentrated in China and East Asia, a region significantly exposed to high seismic activity and geopolitical tensions.
 

Therefore, there is the urgent need to set up regional supply chain for the industry. Nexteck Singapore Pte Ltd and Nexteck Group are already taking action to increase in location and capacity to enhance our local production plants support of packaging materials like WLCSP carrier tape, cover tape, dicing tape to satisfy and put our customers at ease on our neighbour close distance supply chain and technical support service.