Geopolitical Risks in 2025 remain one of the greatest threats to multinational corporations, disrupting operations and creating long-term uncertainty. Why so? To illustrate the impact, this article focuses on how the first six weeks of 2025 have affected the semiconductor industry—an industry that many argue is the linchpin of the global economy.
As the Biden administration ended, the US expanded restrictions on chip exports to China, effectively limiting access to advanced semiconductor technology. This forced US chip manufacturers to reassess supply chains to mitigate billions in at-risk revenue while accelerating China’s push for self-sufficiency.
Meanwhile, military tensions continue to grow in the Taiwan Straits fueling fears of imminent supply chain disruptions. In response, some US and European firms are diversifying chip production outside the region. The US Chips & Science Act continues to drive major investment in domestic chip manufacturing, but this takes time. A conflict or a blockade in Taiwan would cripple the global tech industry, impacting everything from smartphones to military hardware.
It’s no secret that the semiconductor industry is highly reliant on a few key regions for production and as such bottlenecks will certainly choke supply lines when tensions arise. The ongoing shipping disruptions in the Red Sea have slowed delivery of critical components from Asia to Europe and the US. Time is money and these delays increase costs, forcing companies to explore alternative logistics strategies.
How can the industry infuse resilience into its manufacturing and logistics strategies? Supply chain diversification, nearshoring, strategic stockpiling and even government engagement and advocacy are all elements of the solution. However, when do you do what and with whom?
Scenario planning and risk analysis focused on modeling anticipated disruptions must be the center piece of any resiliency strategy. Like it or not, the semiconductor sector is at the center of today’s global geopolitical tensions, with trade restrictions, supply chain disruptions, and national security concerns shaping its future.
With escalating geopolitical risks, businesses that prioritize agility, diversification, and strategic partnerships can set themselves up for success; but not if they don’t invest in scenario planning based on their unique risk profile. In 2025 the semiconductor industry is more intertwined with global politics than ever and their ability to adapt will determine their long-term success in maturing a secure global semiconductor ecosystem.
If the semiconductor industry is truly the linchpin of the global economy, what of those multinational corporations reliant on those chips? Are they taking the appropriate steps to map out strategies and outcomes to increase their speed of action when a risk manifests into a threat that impedes or stifles open market access or limits market penetration.
Finally, as risk mitigation professionals, are we appropriately positioned within our own organizations to not only evangelize the necessity of scenario planning; but also, lead the discussion. Ensuring that risk management is embedded into corporate strategy will be essential for navigating the complex geopolitical landscape of 2025 and beyond.
