chips act's secret weapon: fighting fake semiconductors
Washington, Tuesday, 10 June 2025.
The CHIPS Act is not just about boosting domestic chip production. It also quietly strengthens anti-counterfeiting measures. This offers vital security for critical infrastructure and consumer electronics. The act aims to protect supply chains, ensuring the reliability of semiconductors used in essential applications. Non-compliance could lead to clawbacks of federal funding. Companies like NVIDIA, TSMC, and ASML could see long-term benefits from a more secure market. The U.S. government, through agencies like NIST, is mandating trusted supply chains, emphasizing authenticity and traceability.
nist’s role and funding
The National Institute of Standards and Technology (NIST) is receiving significant funding to develop microelectronics research and standards [1][3]. This includes creating unique identifiers and ensuring supply chain traceability [1][3]. These standards are crucial for anti-counterfeiting efforts, providing a framework for verifying the authenticity of semiconductor components [1]. The CHIPS for America Defense Fund also allocates funding for defense-related semiconductor manufacturing. These funds come with strict requirements for secure boot, hardware root-of-trust, and embedded authentication [1][3].
compliance and potential penalties
Companies must adhere to the CHIPS Act’s requirements to avoid severe repercussions [1][3]. Non-compliance can result in clawbacks of federal funding and ineligibility for future grants [1]. Contract cancellations and civil penalties are also potential consequences [1][3]. This rigorous enforcement mechanism incentivizes companies to prioritize supply chain integrity and invest in anti-counterfeiting measures. This creates a more secure and reliable market for semiconductors, benefiting both manufacturers and consumers [1].
corsearch’s role in supply chain security
Corsearch offers solutions that support supply chain visibility and monitoring [1]. Their services include intelligence gathering and analysis, as well as digital fingerprinting and authentication support [1]. Over 5000 leading brands rely on Corsearch’s solutions [1][3]. Corsearch emphasizes that the CHIPS Act marks a turning point in how the semiconductor industry addresses trust and security [1]. Brand protection specialists recognize that counterfeiting threats are evolving, and compliance expectations are rising [3].
china’s dominance in rare earth minerals
China remains a dominant force in the rare earth minerals market, which are essential for semiconductor manufacturing [2]. By the end of 2024, China produced approximately 70% of the world’s rare earth minerals and controlled over 80% of the global processing capacity [2]. The top countries by rare-earth reserves in 2025 are China with 44 million metric tons, Vietnam with 22 million metric tons, and Brazil with 21 million metric tons [2]. This concentration of resources gives China significant leverage in the semiconductor supply chain [alert! ‘This is a general claim’]. The U.S. holds 1.8 million metric tons [2].
export restrictions and market impact
China’s imposition of export restrictions on critical minerals, including gallium and germanium, further complicates the global semiconductor supply chain [2]. As of April 2025, China imposed export restrictions on seven rare earth elements: scandium, yttrium, samarium, gadolinium, terbium, dysprosium, and lutetium [2]. These restrictions, coupled with existing export controls on advanced semiconductor technologies imposed by the U.S. and its allies, create both challenges and opportunities for semiconductor companies [2]. Companies that can diversify their supply chains and ensure the authenticity of their components are likely to gain a competitive advantage [1][2].
investment opportunities
The CHIPS Act and the evolving geopolitical landscape create investment opportunities in companies focused on supply chain security and anti-counterfeiting solutions [1]. Corsearch, with its established track record and comprehensive suite of services, is well-positioned to benefit from this trend [1][3]. Additionally, companies involved in the domestic production of rare earth minerals, such as those operating in the U.S., may see increased investor interest. For example, researchers estimate that $8.4 billion worth of rare earth elements could be extracted from accessible coal ash supply in the U.S. [2].