Where Global Chip Manufacturing Is Concentrated

While governments in the United States and Europe push to reshore chip production, the global semiconductor supply chain remains heavily concentrated in Asia, underscoring the region’s strategic importance in an increasingly fragmented geopolitical landscape. According to SEMI, worldwide spending on semiconductor materials – covering everything from silicon wafers and photomasks to specialty chemicals used in chip manufacturing – reached $73.2 billion in 2025, offering a proxy for overall industry activity.

As our chart shows, Taiwan continues to dominate, with $21.7 billion in materials spending, marking its 16th consecutive year as the largest market. China follows at $15.6 billion, supported by strong domestic investment and recording double-digit growth (+12.5 percent), while South Korea ranks third with $11.2 billion. Taiwan and North America also posted solid increases of around 8.6 percent and 10.7 percent, respectively. Together, the three leading Asian economies account for about two-thirds of global demand, highlighting how deeply chip production and its critical inputs are concentrated in East Asia.

Behind the top three, Japan and North America recorded $6.8 billion and $6.2 billion in spending, respectively, while Europe lagged further behind at $4.2 billion and was the only major market to see a decline in 2025 (-6.0 percent). Overall, spending growth in this sector was driven by rising demand for more advanced and powerful chips, particularly for applications such as artificial intelligence and high-performance computing.