How semiconductor manufacturers prepare for supply problems

A semiconductor is a silicon wafer with deposited metals that form electrical circuits enabling computation in all our devices.

They can be the size of a fingernail, but there’s nothing simple about these tiny components powering today’s electronics.

Creating one is a difficult, monthslong process requiring etching a polishing of the silicon piece, Guttorm Aase, partner at McKinsey & Company, told us.

“You also need hundreds of materials that are part of this process,” Aase said. “And if you had an interruption in the supply of any of those materials, the whole process stops.”

A recent report from McKinsey says strains on the semiconductor supply chain threaten to put the brakes on US manufacturers.

In the March 2025 findings, McKinsey predicted:

• Demand for chemical and materials used for semiconductors is set to triple, and the US semiconductor market faces a $4 billion funding gap to meet demand by 2030.
• Of the materials and chemicals (including helium and the fun-to-say boron trichloride) needed for semiconductors, 60% are at insufficient supply levels to scale domestically.

Meet a supply-chain pro. As VP of supply-chain management at Phoenix, Arizona-headquartered semiconductor manufacturer Onsemi, Chance Finley has to “make sure that supply equals demand.” That means forecasting manufacturing needs, like all that boron trichloride.

Onsemi has 19 manufacturing sites around the world. Finley sees three important strategies ensuring his global supply chain is a healthy one:

• Multiple fab steps in one location. Onsemi, Finley said, performs fabrication and testing in one place.
• Different sites that can produce the same chip for the same customer. A multi-site setup can help adjust to geopolitical shifts like tariffs, according to Finley, where the company can shift manufacturing to, say, China, to avoid levy impacts.
• Extra inventory. This shortens lead times and buffers for major changes to supply and demand, Finley told us.

The challenge(s) ahead. McKinsey, in its March report, noted seven challenges for US semiconductor companies, including high expenses for production facilities, restrictions on fluorocarbons (which semiconductors have included), and limited access to materials found outside the US, like tungsten hexafluoride.

The bipartisan CHIPS Act in 2022 dedicated close to $53 billion in funding to support domestic semiconductor supply chains—that includes 16 new semiconductor manufacturing facilities, according to an August 2024 announcement from the Department of Commerce.

Building fabrication capacity, however, does not entirely address the need for chemical and material inputs, McKinsey warned in its recent report. Materials like tungsten hexafluoride and hydrogen fluoride require specialized purities, cannot be substituted, and “a disruption in the supply of any of these chemicals could potentially stall the entire chip manufacturing process.”

While companies like TMSC are opening US-based semiconductor fabrication facilities, Benjamin Lee, a computer and information science professor at the University of Pennsylvania, told IT Brew, still sees the benefits of a diverse, global semiconductor supply chain.

“I would hope that we have a number of different diversified trading partners, so even if one of those trading partners lose access to those resources, we have other trading partners to go to,” Lee told IT Brew.

Finley notes that “a major question mark” for the future includes geopolitical factors like how tariffs will impact customer behavior and manufacturing strategy—hence his prioritization of strong partners and healthy inventories. But an increasingly electrified future requires tiny electronics.

“The demand for semiconductors, I see, will only continue to grow,” he said.