One Chip, 70 Borders: Why Trump’s tariffs ignore global realities

Nothing shows the interdependence of the global supply chain more than the chip. It also tells you why no product is really made anywhere and what major production hubs in different parts of the world are actually doing is a complex assembly job. In such an incredibly complex manufacturing matrix, Trump’s idea of “tariffing” countries can only unleash chaos in the short term and fail in the long term.A blowback from even the slightest disruption in the chip-making ecology will be felt just as much in the US as anywhere else. And this will be across sectors because the chip is the brain of every conceivable ‘smart’ device you can think of.The chip is a marvel of engineering. Making one is essentially placing billions of tiny ‘switches’ on boards that enable all the things we do on our devices every day. Now, consider Apple’s M4. Manufactured with 3-nanometre technology, its ‘switches’ are about 80,000 times smaller than an ant. Some of the smallest in use right now.Making this or any other chip involves one of the most complicated production cycles that spans 20 countries, each bringing its own niche — either in terms of expertise or natively available raw material.For instance, TSMC (Taiwan Semiconductor Manufacturing Company) might be the world’s largest chipmaker, but it needs the Dutch ASML’s machines to do it. The Dutch ASML, in turn, relies on optics systems from the German Zeiss.And so, a semiconductor product could cross international borders 70 times before reaching you, an Accenture report says, making it one of the most decentralised supply chains in the world now. It’s not easy to simply replace any part of this complex chain. That’s also because it takes billions of dollars and three to four years just to set up one chip-manufacturing unit.This, here, is the process that involves at least 21 countries through which different parts of a microchip pass through—often multiple times as import or export to that country—before it’s shipped to be used in processors or memories that power everything from smartphones to cars to microwaves or LED lights. medium119639874 medium119639895 medium119639921 medium119639952 medium119639983 medium119641771 medium119641801 medium119641824medium119642041How we did thisWe referred to a report published in February 2025 by the Germany-based economic research group CESifo (Center for Economic Studies and ifo, Information und Forschung) about the global semiconductor supply chain. It lists 70-odd components that either go into a microchip or are used while making it. We clubbed some of the similar categories, and then used trade data from the Observatory of Economic Complexity (because the World Bank WITS and United Nations Comtrade databases do not list Taiwan, one of the most important points in the global supply chain, as a separate territory) to identify the top sources for those components. And then went over market intelligence reports to identify larger trends. For the end-use breakdown, we used the Semiconductor Industry Association 2024 Factbook. The list is, by no means, exhaustive but gives us an idea about how interdependent the trade of just one product can be.