Global Chipmaking: Who Leads and Where

HISILA BHANDARI

Sun, 01 Jun 2025

In the ever-advancing realm of modern technology, semiconductors are the unsung heroes embedded in every device we use. From smartphones and laptops to industrial equipment, medical devices, satellites, and cutting-edge AI systems, semiconductors are the backbone of the digital economy. However, while many talk about the devices themselves, few stop to consider where these vital components come from. This article dives into the geopolitical and economic landscape of chip manufacturing, highlighting the global distribution and implications of semiconductor production capacity. According to the SEMI 300mm Fab Outlook to 2026, chip manufacturing is heavily concentrated in a select few countries. Understanding this concentration is crucial for grasping the economic and strategic priorities of nations in the 21st century.

1. South Korea – The Undisputed Leader (25%)

South Korea leads the world in semiconductor manufacturing, accounting for 25% of the global 300mm fab capacity. This dominance is primarily attributed to two key industry titans: Samsung Electronics and SK Hynix. Samsung, the largest memory chip manufacturer globally, also produces high-end logic chips and continues to invest billions in fabs and research. SK Hynix follows closely behind, focusing on DRAM and NAND flash memory. These two companies alone contribute significantly to South Korea’s global tech standing. The country’s government supports the industry through tax incentives, public-private R&D collaborations, and workforce training. In addition, South Korea has cultivated a strong supplier network, ensuring a resilient and robust production ecosystem. Why it matters: South Korea's dominance in memory chips makes it indispensable to the global tech industry. From smartphones to data centers, memory chips are everywhere, and their disruption could have global ripple effects.

2. China – Rapid Rise and Ambitions (22%)

China's emergence in the semiconductor industry has been dramatic. Within a few years, it has gone from a net importer of chips to a nation that accounts for 22% of global manufacturing capacity. This rapid growth is largely due to aggressive state funding, strategic national initiatives like Made in China 2025, and the rise of local players like SMIC (Semiconductor Manufacturing International Corporation). However, despite this growth, China still lags in advanced process nodes (7nm and below). U.S. export controls and restrictions on ASML’s EUV lithography machines have slowed its efforts to compete in the bleeding-edge segment of semiconductor manufacturing. Still, China continues to dominate in mature nodes and back-end packaging. Why it matters: China is positioning itself as a semiconductor powerhouse. Its progress signals an inevitable shift in the global supply chain and increased geopolitical tension as Western nations strive to maintain technological leadership.

3. Taiwan – The Precision Giant (22%)

Sharing the second-highest capacity with China, Taiwan’s 22% share is synonymous with one company: TSMC (Taiwan Semiconductor Manufacturing Company). TSMC is the world’s largest contract chipmaker and is responsible for producing the most advanced semiconductors available, down to 3nm nodes. TSMC’s clients include tech behemoths such as Apple, Nvidia, AMD, and Qualcomm. Without TSMC, the modern smartphone, high-performance computing, and AI hardware would not exist in their current forms. The island's strategic importance has led to global calls for "chip sovereignty" as countries fear overdependence on Taiwan, especially with ongoing geopolitical tensions in the Taiwan Strait. Why it matters: Taiwan, and specifically TSMC, is the heart of cutting-edge semiconductor manufacturing. Any disruption here would send shockwaves through the global tech industry.

4. Japan – Legacy Strength and Resilience (13%)

Japan, once the semiconductor king in the 1980s, now holds 13% of global chip manufacturing. While it has lost ground in leading-edge logic chips, Japan still plays a critical role in the semiconductor ecosystem. Japanese firms like Renesas, Toshiba (now Kioxia), and Sony specialize in automotive chips, sensors, and flash memory. Japan is also the global leader in semiconductor materials and equipment – from photoresists and silicon wafers to high-precision manufacturing tools. Why it matters: Japan’s strength in materials and niche chip categories makes it a linchpin in the global supply chain. Its contribution, while less visible, is indispensable.

5. United States and the Americas – The Tech Superpower Rebuilding (8%)

The U.S. holds 8% of the 300mm fab capacity, a relatively small figure considering its dominance in chip design and intellectual property. Intel, GlobalFoundries, and Texas Instruments are major players in domestic manufacturing, but much of the actual production occurs overseas. To combat this, the U.S. has introduced the CHIPS and Science Act, pledging $52 billion in subsidies to revitalize domestic chip production. TSMC, Intel, and Samsung have all announced plans to expand fabs in Arizona, Ohio, and Texas. Why it matters: The U.S. is striving to reclaim leadership in manufacturing. While it's still the global leader in chip design, securing its supply chain through domestic production is now a national priority.

6. Europe and the Middle East – Strategic Revival (6%)

Europe’s share sits at 6%, but recent geopolitical events have pushed the continent to invest heavily in semiconductors. The EU Chips Act, worth €43 billion, aims to double Europe's chip production share by 2030. Germany (Infineon, Bosch), France (STMicroelectronics), and the Netherlands (ASML) lead the charge. Europe's focus is largely on automotive, industrial, and power semiconductors, which are vital to its manufacturing economy. Why it matters: Europe is investing in resilience and autonomy. Its specialized semiconductor sectors, combined with ASML’s monopoly in EUV lithography, give it strategic importance.

7. Southeast Asia – The Emerging Hub (4%)

Though Southeast Asia represents only 4% of manufacturing capacity, countries like Malaysia, Vietnam, and Singapore are crucial in back-end processes like assembly, testing, and packaging. Companies including ASE Group and Amkor Technology operate large facilities here, serving as critical nodes in the supply chain. The region benefits from favorable labor costs, proximity to major markets, and political stability. Why it matters: Southeast Asia ensures efficiency and cost-effectiveness in the semiconductor value chain. As companies diversify production away from China, the region’s role will continue to grow.