Impact of Geopolitical Risks on Global Supply Chain Strategies: Evidence from the Semiconductor Industry

Abstract

This study argues that geopolitical risk, not cost efficiency, now decisively structures semiconductor supply chains. Using a systematic literature review (SLR) of 2020-2025 sources and reflexive thematic analysis, it synthesizes four findings. First, sanctions, export controls and critical-mineral dependencies have converted long-known chokepoints (advanced lithography, leading-edge foundries, and specialist materials) into systemic vulnerabilities. Second, firms are not simply “decoupling” but adopting a triad of adaptations: asset re-location (reshoring and nearshoring and dual footprints), supply-base diversification with pre-approved alternates across tiers, and digital risk instrumentation (predictive analytics, control-tower visibility, scenario stress-testing). These moves raise resilience but impose material trade-offs in capital intensity, operating cost and talent constraints. Third, sovereignty-driven policies (e.g., subsidy regimes and export controls) are only partially effective: they crowd in investment yet risk regulatory fragmentation, retaliation, and distorted competition that can reallocate rather than reduce systemic exposure. Finally, the review rejects single-theory explanations. Global Value Chain mapping clarifies interdependence; Resource-Dependency analysis explains power asymmetries; resilience frameworks capture operational levers, none suffice alone. The conclusion is prescriptive and arguing that shift from reactive crisis management to anticipatory, data-driven resilience that hardens critical nodes, expands dual sourcing beyond tier-1 visibility, and aligns industrial policy with interoperable standards to avoid a subsidy-arms race that undermines the very robustness it seeks to build.