The Biden administration in the US was inaugurated in 2021 amid the disruptions in supply chains caused by the COVID-19 pandemic. To address the supply-chain disruptions in a structural manner, the administration embarked on a series of policies aimed to strengthen the country’s supply chains in strategically important industries including semiconductors and batteries for electric vehicles (EVs hereinafter). In particular, the administration aims to reduce its reliance on foreign countries, especially China, and increase self-sufficiency. While discussions on the US government’s policies are abundant in the media and among policymakers, empirical evidence on how firms, who actually designs supply chains, are responding is lacking. Furthermore, existing supply chains are the results of optimization when they were designed, and there is significant uncertainty regarding the future of the US government’s policies on supply chains. It thus remains uncertain whether firms will align with the Biden administration’s intentions.

This report aims to establish some empirical evidence on the responses of major firms in the semiconductor and EV battery industries to the Biden administration’s supply-chain policies, based on quantitative data. The semiconductor and EV battery industries are major export industries in Korea, and both the US and China hold crucial positions in the supply chains that involve Korea. The decision-making of major foreign firms is an important factor of consideration in Korean government’s economic security policies and Korean firms’ decisions on their own supply chains. This report aims to provide some reference for them.

Following the Introduction, Chapter 2 provides an overview of the US government’s policies on supply chains in the semiconductor and EV battery industries. Chapter 3 analyzes the current state of supply chains in the semiconductor and EV battery industries, and Chapter 4 analyzes the responses of major firms in those industries to the US government’s policies. Chapter 5 summarizes the key findings of this report and offers implications for the Korean government and businesses.