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Life Cycle Logistics

New Report on Supply Chain Interdependence

New Report on Supply Chain Interdependence

New Report on Supply Chain Interdependence
Bill Kobren

The RAND National Security Research Division has issued a new report of interest to the life cycle logistics and product support management community entitled “Supply Chain Interdependence and Geopolitical Vulnerability: The Case of Taiwan and High-End Semiconductors”.

According to the research team, “semiconductors have become an integral part of nearly every industry in advanced economies. The production of these semiconductors is largely centered in the western Pacific region and, for the highest-end semiconductors, exists almost entirely in Taiwan. To assess the geopolitical implications of Taiwan's semiconductor dominance, the authors conducted a tabletop exercise (TTX) with representatives from the executive and legislative branches of the U.S. government and a variety of industries that rely on semiconductors. The exercise revealed that there are generally no good short-term options for responding to the disruption to the global semiconductor supply chain that would result if China attempted to unify with Taiwan. The importance of semiconductors in the broader economy means that strategic competition should be framed more broadly than its potential effect on military or political outcomes. The countries that can most easily withstand disruptions to semiconductor capacity in Taiwan have an upper hand in strategic competition. If the United States and its allies have this advantage, it could be a powerful deterrent to Chinese action against Taiwan. If China has the advantage, it could act against Taiwan with reduced likelihood of interference from the United States and its allies to mitigate its global economic risk. In the TTX, the United States never gained an advantage and faced unfavorable outcomes in both peaceful and contested unification scenarios. This should be a call to action for the United States to assess options to increase semiconductor fabrication capacity.”

Note: Inclusion of this report here is for defense acquisition workforce professional development informational purposes only and does not imply either DoD or DAU endorsement of any particular author, organization, or recommendation. For additional information on supply chain resiliency and risk management topics, including training and related resources, see an earlier DAU LOG Blog post entitled “Hot Topics (Part 1): Supply Chain Resiliency”.