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China is hoping to be able to produce 70% of the semiconductors it needs by 2025, as it tries to cut reliance on overseas manufacturers. (Source photo by Reuters) 

Structure of chip industry hinders supply chain recovery

Over-reliance on Asia has led some companies to repatriate production

EIKI HAYASHI, KAZUYA MANABE and HIDEAKI RYUGEN, Nikkei staff writers | East Asia

Tokyo -- Despite a steep rebound in automobile demand, production has been hampered by problems in the semiconductor supply chain which is still struggling to return to full capacity after battling a pandemic, natural disasters, accidents and trade tensions.

In large part, the chip supply chain is snarled up because of the concentration of producers in a few countries, a situation that limits the dispersion of risks. Intel CEO Patrick Gelsinger recently stressed the need for a "more balanced supply chain," given that the current production of critical chips is concentrated in East Asia.

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