TRENDS IN THE DEVELOPMENT OF GLOBAL VALUE CHAIN IN THE SEMICONDUCTOR INDUSTRY

Abstract

The article is devoted to the consideration of modern trends in the development of global value chains of the semiconductor industry. The study examines the participation in global semiconductor value chains of different countries' economies. Massive innovations in semiconductor technology have resulted in extremely high costs for the development and production of advanced chips since 2010. Only a few market leaders dominate various segments of the global semiconductor value chain, from software development and intellectual property to materials and equipment suppliers. American firms play an almost monopolistic role in software development for integrated circuits, while a small group of highly specialized firms dominate hardware manufacturers. At the same time, increasingly complex chip design and manufacturing processes and accompanying ecosystems of highly specialized firms today mean that no economy can be self-sufficient across the entire semiconductor value chain. The emergence of the factory-free production model increased the functional and geographic specialization of the industry at the task level. For example, American fab processor firms specialize in the design and marketing of integrated circuits, while East Asian semiconductor firms are responsible for wafer fabrication and downstream manufacturing activities. As a result, wafer production in the global semiconductor industry has become highly concentrated in the Republic of Korea, the People's Republic of China, Japan, and Singapore, which together accounted for about 80% of the total global wafer production capacity in the 2018-2023 period. Consequently, the desire of a number of countries to establish semiconductor factories is unlikely to be realized due to the complex organization of existing global semiconductor value chains and the extraordinary demand for technological capabilities, capital investment in advanced chip manufacturing, and technological sovereignty. Thus, the race to build factories everywhere is likely to lead to a fragmented rather than an integrated global semiconductor market, which will inevitably undermine economies of scale and trust in the sector and further exacerbate the oversupply of semiconductor manufacturing capacity worldwide.