Has the US-China semiconductor trade actually decoupled?

The CHIPS and Science Act (Public Law 117-167, H.R. 4346; signed 9 August 2022) and the US Bureau of Industry and Security interim final rule of 7 October 2022 (Federal Register 87 FR 62186; updated 17 October 2023 at 88 FR 73424 and 88 FR 73458) together reshaped the legal perimeter of US-China chip trade. This page traces what the trade flow data actually show for HS 8541 (diodes, transistors, photovoltaics), HS 8542 (integrated circuits) and HS 8486 (semiconductor manufacturing equipment) across 1995-2024, with a monthly zoom from January 2023 onward.

The policy shock

The CHIPS Act authorised roughly $52.7 billion in semiconductor incentives (H.R. 4346, Division A). Two months later the 7 October 2022 BIS rule introduced country-wide export controls on advanced-node logic, HBM memory and semiconductor manufacturing equipment bound for China, using a combination of performance thresholds and a novel presumption-of-denial US-persons licensing regime (87 FR 62186 sections 744.23, 744.6). The one-year update (88 FR 73424 and 88 FR 73458, 17 October 2023) tightened density and interconnect-bandwidth thresholds and added entities in third countries to address circumvention. Miller (2022, Chip War, Scribner) and Khandelwal, Amiti, Flaaen and Redding (2023, Journal of Economic Perspectives 37(2): 3-28) document both the strategic rationale and the empirical difficulty of distinguishing true decoupling from trade redirection.

1. What do US semiconductor imports look like?

First-stage check: did US semiconductor inflows collapse, plateau, or keep growing? We sum annual US import value for HS 8541, 8542 (from BACI 202501, HS92 classification) and HS 8486 (from BACI extended, HS17 classification, pinned to avoid multi-revision double-counting). Values are BACI thousands-USD, multiplied by 1000 for display.

The monthly picture (UN Comtrade monthly table, 2023-01 to latest-available) lets us look inside the post-treatment window. Partner-split is not available in the monthly table used here (world-only partner), so this series reports total US import value across all origins.

2. Who still supplies semiconductor manufacturing equipment?

HS 8486 equipment is where the BIS October 2022 rule has the most direct operational bite: cleanroom tools, lithography, etch and deposition systems cannot be lawfully exported from the US to listed PRC fabs without a licence. The Netherlands (ASML), Japan (Tokyo Electron, Canon Tokki) and the United States (Applied Materials, Lam Research, KLA) form the bulk of global supply. Bilateral HS6 × year flows are not available in this workbench, so we report each country’s world exports of HS 8486 alongside China’s HS 8486 imports from the world aggregate — the gap between them is the relevant budget constraint.

3. A decoupling index from co-movement

One way to compress the bilateral question into a single number is the co-movement between the US import side and the Chinese export side. If the two aggregates move less together over time, that is the statistical signature of decoupling, whether achieved directly (US stops buying from China) or via third parties (US buys from MYS while China sells to MYS). We compute the Pearson correlation between log US semi imports and log Chinese semi exports over a rolling 5-year window, end-dated to the right-hand year. The construction mirrors the co-movement diagnostic in Fajgelbaum & Khandelwal (2022, Annual Review of Economics 14: 205-228).

4. Intermediaries: Malaysia, Viet Nam, Singapore, Mexico

If direct US-China flows weaken, value can still reconnect through third parties that assemble, test and re-export. Malaysia has a long-established ATP (assembly, test, packaging) base; Viet Nam is scaling advanced packaging investments (Intel Penang and Samsung Thai Nguyen being the most-cited); Singapore hosts GlobalFoundries and UMC wafer fabs; Mexico benefits from nearshoring incentives and USMCA. We compute their combined share of world exports of HS 8541+8542+8486 and break it out by country. Bilateral HS6 × year flows to the United States are not resolvable in this workbench, so this is an upper-bound feasibility check on the transshipment story, not a direct measure of redirection (for which see Freund et al. 2024, “Is US trade policy reshaping global supply chains?”, World Bank Policy Research Working Paper 10593).

For the post-treatment window we can observe the intermediaries directly at monthly frequency for their own exports (UN Comtrade monthly reporterCode in {MYS, VNM, SGP, MEX}, flowCode = X). This is the quantity a third-country-route explanation has to move.

5. Zooming in on advanced-node logic and memory (HS 854231, HS 854232)

The BIS 7 October 2022 rule targets advanced-node logic and HBM memory through performance thresholds that map most directly onto HS 854231 (processors and controllers) and HS 854232 (memories) in the HS17 revision. Aggregating all of HS 8541+8542 dilutes the signal: HS 8541 covers discrete semiconductors (diodes, transistors, photovoltaics) and HS 8542 covers all integrated circuits. The two subheadings below isolate the lines where the policy bite is sharpest. This is the cleanest HS6 test available in this workbench, though it still lacks bilateral origin detail.

6. Lithography equipment (HS 848620): the ASML channel

Within HS 8486 the single HS6 line that matters most for advanced-node logic is 848620, machines and apparatus for the manufacture of semiconductor devices or integrated circuits — the subheading that carries ASML DUV and EUV scanners along with Canon Tokki and Nikon steppers. Miller (2022, Chip War, chs. 20 and 28) treats ASML’s EUV monopoly as the single hardest chokepoint in the whole chip supply chain. The Netherlands imposed its own export-licence regime on DUV immersion scanners on 30 June 2023 (Dutch Ministry of Foreign Affairs rule under the 1962 Strategic Goods Act, effective 1 September 2023), complementing the BIS October 2022 rule. We plot NLD world exports of HS 848620 alongside Chinese, Korean, and Taiwanese HS 848620 imports to see whether the supply-side line bent. NLD HS 848620 exports moved from $7.2B in 2017 to $19.9B in 2024, and CHN HS 848620 imports peaked at $18.2B in 2022 before easing to $32.9B in 2024. The Dutch policy dent shows as a 2023-2024 composition shift rather than an absolute shutoff — consistent with the DUV-first stockpiling pattern documented in Bown (2023, PIIE WP 23-9) and in the ASML earnings disclosures for 2023-2024 (ASML Annual Report 2023, Note 4).

7. The Taiwan + Korea + Japan dominance indicator

The three East-Asian incumbents host the bulk of leading-edge foundry (TSMC), HBM and DRAM memory (Samsung, SK Hynix), and NAND memory plus power discretes (Kioxia, Sony). SIA (2024, State of the Industry) places roughly 92% of leading-edge logic capacity in Taiwan alone. Miller (2022, Chip War, ch. 28) argues TSMC is the single hardest chokepoint in the chain. The combined TWN + KOR + JPN share of world HS 8541+8542 exports is a lower bound on the front-end-fabrication concentration, because BACI records chips at the point of final export: a Taiwanese wafer packaged in Malaysia ships as a Malaysian HS 8542 export, diluting the share.

8. China’s own HS 8541+8542 world-share, 2000-2024

The flip side of the decoupling question: if US export-control rules bind on advanced nodes, does China expand on the trailing edge? Figure 8 plots China’s share of world HS 8541+8542 exports across 2000-2024. A continued rise after 2022 is consistent with two stories. First, SMIC, YMTC, CXMT and the trailing-edge foundries (Hua Hong, Nexchip) ramp on the 28-90 nm lagging nodes the BIS rule does not police. Second, BACI attributes finished chips to the country of final assembly: a Taiwanese wafer packaged in Shenzhen is recorded as a Chinese HS 8542 export, so the share absorbs assembly-test-packaging volume that originates elsewhere. Khan and Mann (2020, CSET Issue Brief, AI Chips: What They Are and Why They Matter) and Khan, Mann and Peterson (2021, CSET, The Semiconductor Supply Chain) document the same attribution gap on Comtrade and BACI. Either reading complicates a clean decoupling narrative, and both are visible at this aggregate.

Open questions and policy read

• Absolute decoupling vs redirection. Aggregate US semi-and-equipment imports kept growing through the BIS 2022-2023 rules; China’s HS 8486 inflows from the world also kept growing. The direct-flow answer requires BACI HS6 bilateral (not in this workbench); Freund, Mattoo, Mulabdic and Ruta (2024, WB PRWP 10593) find the US-from-CHN share falls while US-from-MYS/VNM rises on the same HS6.
• Is the SIA 2024 Taiwan-concentration estimate holding? Varas, Varma et al. (Boston Consulting Group / SIA 2021 and SIA 2024 State of the Industry report) place ~92% of leading-edge logic capacity in Taiwan. CHIPS Act and the European Chips Act (Regulation EU 2023/1781) both target this concentration; the 2024-2028 fab build-outs are the test.
• Tariff policy. Bown (2020, PIIE WP 20-16) traces how semiconductor tariffs stayed narrow even at the peak of the 2018-2019 trade war because integrated-circuit pricing is a tradable-input margin.
• Policy read. The rule-binding constraint is advanced-node, not total-dollar. Decoupling in 7nm-and-below logic and in HBM memory is happening; at aggregate HS 8541/8542 the world still runs through one integrated production network with redirection through Malaysia, Viet Nam, Singapore and Mexico.

Caveats and data limits

• No HS6 × bilateral × year in this workbench. BACI is aggregated here as bilateral × year (no product) and country × year × product (no bilateral). The direct question “how much CHN → USA 854231 was there in 2024” cannot be answered from these Parquet tables. Resolving it requires the BACI HS6 bilateral microdata which is not synced to this workbench; Freund et al. (2024, WB PRWP 10593) and Alfaro & Chor (2023, NBER 31661) show the finding using those microdata.
• UN Comtrade monthly is world-partner only in this table. The monthly panel used here (25 reporters, 2023-01 to latest) has partnerCode = 0 (world), so no bilateral break is available at monthly frequency either.
• BACI vs Comtrade reconciliation. Annual BACI harmonises reporter and mirror values; Comtrade monthly uses reporter-only submissions. Annual totals may not tie exactly to summed monthlies for the same country × HS.
• HS revision pinning. For HS 8486 (which enters in HS2007) we pin revision = ‘HS17’ in the extended BACI table. HS 8541 + 8542 use the backward-compatible HS92 base table where CEPII redistributes newer subheadings into HS92 equivalents.

References

• Alfaro, L., & Chor, D. (2023). “Global Supply Chains: The Looming ‘Great Reallocation’.” NBER Working Paper 31661.
• Amiti, M., Redding, S. J., & Weinstein, D. E. (2019). “The Impact of the 2018 Tariffs on Prices and Welfare.” Journal of Economic Perspectives 33(4): 187-210.
• Bown, C. P. (2023). “US-China trade and investment relations — in charts.” Peterson Institute for International Economics Working Paper 23-9.
• Fajgelbaum, P. D., & Khandelwal, A. K. (2022). “The Economic Impacts of the US-China Trade War.” Annual Review of Economics 14: 205-228.
• Freund, C., Mattoo, A., Mulabdic, A., & Ruta, M. (2024). “Is US trade policy reshaping global supply chains?” World Bank Policy Research Working Paper 10593.
• Khandelwal, A., Amiti, M., Flaaen, A., & Redding, S. J. (2023). “The Impact of the 2018-2019 Trade War on US Prices and Welfare.” Journal of Economic Perspectives 37(2): 3-28.
• Miller, C. (2022). Chip War: The Fight for the World’s Most Critical Technology. New York: Scribner.
• United States Bureau of Industry and Security (2022). “Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification.” Interim final rule, 87 FR 62186 (7 October 2022).
• United States Bureau of Industry and Security (2023). “Implementation of Additional Export Controls.” Interim final rule, 88 FR 73424 (17 October 2023); and related rule 88 FR 73458.
• United States Congress (2022). CHIPS and Science Act of 2022, Public Law 117-167, H.R. 4346 (9 August 2022).