Chip Talk > The Geopolitical Shift Reshaping Global Semiconductor Supply Chains
Published September 03, 2025
In recent years, the semiconductor and electronics supply chain has undergone radical transformations triggered by rising artificial intelligence (AI) advancements, shifting market leaderships, and geopolitical tensions. As DIGITIMES analysts revealed, technological innovations have significantly contributed to reshaping market giants, with AI leading the transformation.
The company landscape has notably evolved since 2018, a period that saw five top technology companies among the world's ten largest by market capitalization. In contrast, by 2025, nine of these industry leaders are now tech firms, indicating a dominating presence across the technological and semiconductor realms. Notable entities such as Nvidia, Broadcom, and TSMC are key players within this rapidly growing sector.
Taiwan's evolving role in contract manufacturing draws particular attention. Historically commanding a 78% revenue share among top ODMs and EMS firms, its influence diminished as Chinese suppliers expanded their market footprint, seizing a 22% share by 2024. However, an increased demand for AI servers, spurred by hyperscaler needs and Nvidia's growing presence, saw Taiwan regaining ground with a 70% market share by early 2025.
In the realm of semiconductors, fabless companies like Nvidia are seeing substantial growth, capturing a 12% share in the global chip market by 2024. Meanwhile, companies such as TSMC hold steadfast as leaders in the global foundry market, maintaining a significant 55% share.
DIGITIMES identifies three "battlefields" shaping the current technology landscape. The first, driven by the US-China geopolitical rivalry, centers on supply chain relocations. Many companies are adopting a "China+1" strategy to mitigate reliance on a singular manufacturing region. Consequently, Vietnam, India, and Mexico are emerging as favored locations for assembly operations.
The second battlefield revolves around cloud and AI infrastructure. Nvidia has outpaced traditional semiconductor giants like Intel and AMD, becoming the dominant platform for AI workloads. According to DIGITIMES, AI servers will soon represent 12% of global server shipments, a figure expected to grow steadily with high-end AI systems experiencing a growth rate of 44% annually.
The final battlefield, edge AI, focuses on expanding into consumer and industrial devices. While Chinese manufacturers are poised to dominate consumer electronics-based edge AI, Taiwanese suppliers increasingly cater to data security and enterprise-focused requirements, emphasizing computing and network devices.
Geopolitical dynamics continue influencing the global manufacturing landscape. A prominent example lies in the US server Electronic Manufacturing Services (EMS) transition. Taiwanese firms like Foxconn and Inventec are expanding their footprints across American soil, establishing facilities in Texas, California, and Tennessee. Despite this surge, a heavy reliance on critical components sourced from Asia persists.
Notably, AI servers using Nvidia's H200 GPUs predominantly undergo essential assembly processes in Taiwan, although US facilities are steadily increasing their capacity. The looming question is whether US-headquartered manufacturing hubs can become self-sufficient amidst ongoing geopolitical tensions, especially given TSMC’s continued advanced packaging dependencies.
The global technology market is fragmenting into distinct blocs—US, China, and the rest of the world—each vying for influence and technological supremacy. As Taiwan experiences a manufacturing resurgence courtesy of AI infrastructure demands, China's growth in consumer-focused edge AI persists.
Those interested in acquiring deeper insights into these developments can look forward to the Semiconductor Supply Chain 2025+ Seminar hosted by DIGITIMES, slated for late September. Attendees will have the opportunity to engage with industry experts regarding AI, manufacturing shifts, and overall international supply chain trends, drawing more profound insights into the future of the semiconductor sector.
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