McAnulty College and Graduate School of Liberal Arts
Network Analysis, Exports, Foreign Trade, Imports, Chips, Diversification
Integrated circuits (colloquially referred to as chips) are an increasingly critical commodity experiencing continuous and substantial rises in demand. These increases in demand recently resulted in shortages. This paper seeks to understand the market for chips and construct a framework by which a network analysis of trade flows can evaluate concentration in the international market for a particular product category. Leveraging this framework and proposing a new model, I evaluate the level and nature of concentration in the chips sector, as well as two key inputs to the manufacturing process, silicon and chip fabricators. I find moderate-to-high levels of concentration in international trade flows for chips, fabricators and silicon. This concentration indicates that firms in China, Taiwan and Korea are investing the most in long-term chip manufacturing infrastructure. It further indicates that firms in the Netherlands, the US and Japan play a crucial role in chip manufacturing development. I also find that Taiwan is the most globally central chip exporter and examine how major nations in the market for chips may be impacted by a reduction in Taiwanese chip trading activity. Taken together with existing literature surrounding trade diversification, these results point to a need for firms to diversify the growing international market for chips.
Martens, N. (2023). DO INTEGRATED CIRCUITS MAKE FOR AN INTEGRATED SUPPLY CHAIN? A NETWORK ANALYSIS OF TRADE FLOWS (Master's thesis, Duquesne University). Retrieved from https://dsc.duq.edu/etd/2138