This brief is a working paper by IDEAS in relation to the semiconductor industry, its relationship with supply chain resilience and potential trade implications. The semiconductor industry stands as a foundation of modern technology, powering an array of electronic devices essential to daily life. With over 100 billion devices incorporating semiconductors, their presence underscores their pivotal significance in driving global value chains and technological advancement (SIA, 2023). The semiconductor supply chain operates within a highly complex web which incorporates players from all levels of the industry.

However, this complexity also presents challenges, including dependencies on specific nodes and geopolitical risks, exemplified by disruptions caused by the pandemic and rising trade tensions between the US and China. In navigating these challenges, policymakers must consider strategies to enhance supply chain resilience. This working policy brief explores the current thinking on semiconductor supply chain resilience, with a focus on Taiwan and Malaysia's roles within the industry. It highlights the challenges and potential benefits of trade agreements in bolstering resilience and underscores the importance of proactive measures to mitigate risks and foster a more resilient semiconductor ecosystem.