Highlights

• University of Virginia researchers mapped microelectronics supply chains using multiplex trade networks, finding U.S. vulnerability centers on refined and processed inputs—not raw materials—where China controls key bottlenecks.
• China holds leverage ratios exceeding 4:1 for raw rare earths and 10:1 for refined rare earths over the U.S., creating asymmetric dependencies in critical processing steps for semiconductors and defense electronics.
• The study stress-tested supply networks material-by-material, showing that removing top 1-3 suppliers in refined categories can collapse trade flows and force costly rerouting—proof that processing concentration, not mining, determines strategic risk.

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A new technical report (opens in a new tab) from the Biocomplexity Institute at the University of Virginia (opens in a new tab) offers a crisp, data-driven answer to a question investors and policymakers keep circling: Where, exactly, is the microelectronics supply chain most fragile—and who holds the leverage? Led by Anil Vullikanti and Achla Marathe with a broad interdisciplinary team, the study—Supply Chain Disruptions in Microelectronic Inputs: A Comparative Analysis of US and China (Dec. 15, 2025)—finds a defining asymmetry: raw-material trade is relatively diversified, but refined and processed inputs are far more concentrated, and in several categories China sits at or near the center of the bottleneck.

The report’s central message is not that the U.S. lacks resources. It’s that the U.S. is more exposed where value is created and chokepoints form—in refining, separation, intermediates, and high-value processing for inputs like rare earth elements, gallium, germanium, cobalt compounds, silicon intermediates, and tantalum.

Study

Instead of treating “critical minerals” as one big blob, the researchers build material-by-material trade networks using UN Comtrade data for 2017–2025 at the 6-digit HS code level. Each HS6 commodity becomes a layer in a multiplex network (a stacked network of networks), allowing the authors to run targeted stress tests that resemble real-world policy actions—export controls, sanctions, supplier exits.

They quantify four key things:

• Disruption scores: How much trade flow drops if a supplier (or top 1–3 suppliers) is removed
• Lock-in vs. substitutability: Whether the “most disruptive” suppliers stay the same year after year (a sign of structural dependency)
• Leverage ratios: A measure of bilateral dependence (import dependence by quantity) relative to the exporter’s exposure (export share by value)
• Network fragility: Whether trade routes become longer, more expensive, or unreachable when key nodes vanish

Two important technical notes the report is transparent about: “EUR” is treated as the European Union as a unit, and “R4” denotes ASEAN in their figures—choices that can mask country-level nuance but help reveal system-level structure.

What the Analysis Shows

1) Raw materials are broader; refined materials are tighter

China imports far more raw materials than it exports, drawing heavily from countries like Australia, Guinea, Indonesia, Turkey, and Mozambique. For refined materials, the pattern flips: China’s exports exceed its imports. The U.S. is closer to the mirror image—stronger in some raw exports, more reliant on refined imports.

2) The U.S. is more “locked in” on refined inputs

In multiple refined categories, the U.S. depends on a small supplier set—sometimes one or two countries repeatedly appear as top disruptors. China, by contrast, often sources refined inputs from a broader supplier pool, implying greater substitutability if one exporter is disrupted.

3) Rare earth leverage is the headline

The report’s leverage ratios are stark in the rare earth bucket: China’s leverage over the U.S. is reported as >4 for raw REEs and >10 for refined REEs. In plain terms, the U.S. depends more on China for these flows than China depends on the U.S. as a destination—an asymmetric position that can matter in negotiations, export controls, and crisis scenarios.

4) Disruptions don’t stay local

Removing just the top 1–3 “maximum disruption” suppliers in certain refined categories can sharply reduce flows and force rerouting through longer, costlier paths—conditions that can propagate into semiconductors, defense electronics, AI hardware, and power electronics.

Why This Matters for Rare Earths and Critical Minerals

REEx readers already know the mantra: mining is not the whole game—processing is. This report supports that view with a network lens. It shows that strategic power often sits where processing is concentrated, and redundancy is thin—especially in refined and intermediate inputs that quietly determine whether fabs and defense primes can build on time.

Limitations and Contested Terrain

This is a trade-network stress test, not a prediction of the future. It does not model changes in demand, wars, pandemics, or rapid substitution. Some materials were identified and grouped with AI-assisted methods (then validated), and HS-code classification inevitably blends certain intermediates into the “refined” bucket. Still, the authors are explicit about these constraints—and the convergence of multiple metrics strengthens confidence in the core pattern.

The Bottom Line

This report argues—convincingly—that microelectronics supply chains are only as resilient as their most concentrated processing steps. For the United States, the highest-risk exposure is less about digging rock and more about narrow refining and materials-processing chokepoints, many of which remain concentrated in China and a small set of other exporters. Until alternative processing capacity scales, refined critical inputs will continue to behave like strategic pressure points, not ordinary commodities.

Citation: Vullikanti, A., Marathe, A., Turhan, B., Foster, M., Machi, D., Klahn, B., Schroeder, A., Wilson, M. L., Swarup, S., Potter, P., Barrett, C., & Marathe, M. V. (2025). Supply Chain Disruptions in Microelectronic Inputs: A Comparative Analysis of US and China. Biocomplexity Institute Technical Report BI-2025-21.

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