Semiconductor import substitution (and other electronic components) to the United States from China is continuing as a result of the trade war between the two nations.

According to data from the U.S. Department of Commerce, from 2017 to 2023, U.S. imports of those products originating in China fell 57.9%, to $9.768 billion.

Comparing that same period, Taiwan increased 255% its sales of semiconductors and other electronic components to the United States, reaching $21,979 million. 

Semiconductor import substitution

The following are the top semiconductor and other electronic component exports to the United States, by economy, with data in millions of dollars, corresponding to 2023 and with their variation compared to 2017:

• Taiwan: 21,979 (+255 percent)
• Malaysia: 15,334 (-2.6, percent).
• South Korea: 8,679 (+37.4 percent)
• China: 9,768 (-57.9 percent)
• Vietnam: 10,365 (+197.7 percent)
• Mexico: 8,261 (+68.9 percent)
• Japan: 4,995 (+2.3 percent)
• Thailand: 8,895 (+324.8 percent)
• Israel: 2,863 (+308.3 percent)
• Germany: 2,393 (+59.2 percent)

Total imports of semiconductors and other electronic components to the United States in 2023 were $113.476 billion, up 39.9 percent year-on-year.

Data and incentives

These are the same statistics as above, but for the period January-August 2024, with year-on-year variations:

• Taiwan: 23,649 (+67.96 percent).
• Malaysia: 9,984 (-0.88 percent)
• South Korea: 6,566 (17.40 percent))
• China: 5,918 (-9.53 percent)
• Vietnam: (5,667 (-14.16 percent))
• Mexico: 5,322 (-1.53 percent)
• Japan: 3,670 (+10.34 percent)
• Thailand: 3,618 (-38.04 percent)
• Israel: 3,118 (+95.87 percent)
• Germany: 1,592 (+3.06 percent)

Total imports of semiconductors and other electronic components to the United States from January to August 2024 were $79.662 billion, up 7.4 percent year-on-year.

U.S. policymakers have expressed concern about the country’s declining share of global semiconductor production. In addition, they have pointed to the lack of advanced capabilities in the manufacturing of these components. To address this situation, the House of Representatives and the Senate passed bills. 

These bills, passed in June 2021 and February 2022, allocate $52.7 billion in public funds. The goal is to incentivize semiconductor companies to build, expand and equip domestic manufacturing facilities and companies in the U.S. semiconductor supply chain.  

Industry

In addition, the law provides funding for federal R&D activities in the semiconductor area. These will be conducted through the National Institute of Standards and Technology. It also includes the creation of a National Semiconductor Technology Center, in collaboration with U.S. industry. In addition, a National Advanced Packaging Manufacturing Program will be promoted and up to three Manufacturing USA institutes will be established.

The Act also created and funded three additional funds. These funds are intended to strengthen U.S. semiconductor capabilities in three key areas: national defense, workforce development, and international cooperation.