HS Code:
The 'Chips' category, often classified under HS Code 8542 (Electronic Integrated Circuits and Microassemblies), encompasses semiconductor chips and integrated circuits used in a wide range of electronic devices, including smartphones, computers, automotive systems, and industrial equipment. This category is a cornerstone of modern technology, driving innovation in artificial intelligence, 5G connectivity, and IoT (Internet of Things). Global trade in chips is highly competitive, influenced by technological advancements, geopolitical factors, and supply chain dynamics.
Total Trade Volume
USD 600 billion
Data from 2022
Source
World Trade Organization (WTO) and International Trade Centre (ITC)
USD 150 billion
25% of global trade of total trade
Increasing
USD 120 billion
20% of global trade of total trade
Increasing
USD 90 billion
15% of global trade of total trade
Stable
USD 80 billion
13% of global trade of total trade
Increasing
USD 50 billion
8% of global trade of total trade
Stable
Average Rate
4.5% ad valorem
Highest Rate
15% (imposed by certain developing economies)
Lowest Rate
0% (under free trade agreements like USMCA and EU-Japan EPA)
Rising demand for AI and 5G chips
Increased production capacity investments in Taiwan and South Korea, driving trade growth by 10-15% annually.
2021-2023
Global chip shortage
Disrupted supply chains for automotive and consumer electronics, leading to price surges and trade imbalances.
2021-2022
Onshoring and regionalization of production
Countries like the US and EU are incentivizing domestic chip manufacturing, potentially reducing reliance on Asian exporters.
2022-2023
The US government passed the CHIPS and Science Act, allocating USD 52 billion to boost domestic semiconductor manufacturing and research.
August 2022
Expected to increase US share in global trade while reducing dependence on foreign supply, potentially shifting trade dynamics.
Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest chipmaker, announced new fabs in the US and Japan to meet global demand.
January 2023
Strengthens Taiwan's dominance in trade while diversifying production locations, mitigating geopolitical risks.
The European Union introduced the European Chips Act to invest EUR 43 billion in semiconductor production, aiming for 20% of global market share by 2030.
February 2023
Likely to increase EU imports of chips in the short term and boost domestic production in the long term, affecting global trade patterns.