Across 2007-2024, the world market for electronic integrated circuits: processors and controllers, whether or not combined with memories, converters, logic cir sits at an HHI of 1,171 on the 0-10,000 scale. The single largest supplier, Chinese Taipei, accounts for about 23% of global exports: if that origin goes dark, the world loses roughly that share of supply overnight. The ranked alternative suppliers, their unit values, tariff exposure into USA, and distance to destination are tabulated below.

How concentrated is global supply

The Herfindahl-Hirschman index (Hirschman 1945; Herfindahl 1950) sums squared exporter shares of world trade for this HS6. Higher HHI means fewer sellers dominate. The US Department of Justice and Federal Trade Commission Horizontal Merger Guidelines (DOJ/FTC, 2023, section 2) treat markets with HHI above 1,800 as 'highly concentrated', and HHI between 1,000 and 1,800 as 'moderately concentrated', on the 0-10,000 scale used here.

Who supplies the world today, and how that has shifted

Cross-section snapshot: top-10 exporter shares in 2024, annotated with the same country's share 15 years earlier in 2009. The gap between the two reveals rising and falling suppliers, a diagnostic emphasised in Baldwin & Freeman (2022, Annual Review of Economics) on global-value-chain restructuring after the 2018 tariff shock and the pandemic supply break.

Alternative suppliers, ranked

For each exporter with at least 1% of the world market in 2024, we compute global share, export unit value (USD per BACI canonical quantity unit; reads as USD per metric ton for product codes where tonnes is the canonical unit, otherwise interpret as USD per the HS-specified unit), the simple-average applied tariff facing that origin in USA (from the WITS-TRAINS preferential-tariff compilation via CEPII), and the bilateral great-circle distance to USA (from the CEPII Gravity dataset, V202411; see Head & Mayer 2014, Handbook of International Economics, chapter 3, for the construction).

A summary 'diversification score' ranks these origins for a buyer trying to split away from the dominant supplier. The score combines current share, distance penalty, and a quality tilt anchored on the median exporter's unit value:

score = share × [ 1 / (1 + d_km / 10,000) ] × q
q     = clip( UV_i / UV_median , 0.5 , 1.5 )

Which importers face single-source risk

Grossman & Rossi-Hansberg (2008, AER) and Baldwin (2012) on the 'second unbundling' framed sourcing concentration as an unpriced risk in the gains-from-trade calculus. The OECD geodepdatabase (Arjona, Connell & Pisu, 2023, ECO/WKP 1775) operationalises that risk per importer × HS6 as the share of imports coming from the single largest origin. Forty percent is a conventional supply-chain single-source threshold in vendor consolidation reviews; above that, diversification is a board-level conversation.

Momentum: who is rising, who is fading

For each of the 2024 top-10 exporters, the compound annual growth rate of HS 854231exports between 2019 and 2024. Rising stars and has-beens separate cleanly in markets with shifting comparative advantage, as in the semiconductor-capacity reshuffling surveyed by Bown (2020, 'How the United States Marched the Semiconductor Industry into Its Trade War with China,' East Asian Economic Review 24(4)).

How unstable is the exporter mix?

High HHI says few sellers share the market. It is silent on whether those sellers have held their positions or are constantly reshuffling. Davis, Haltiwanger & Schuh (1996,Job Creation and Destruction, MIT Press, Ch. 2) define a reallocation index as the sum of absolute share changes, a one-sided analogue of gross job flows applied here to HS6 exporter shares: R_t = (1/2) · Σ_i | s_i,t − s_i,t-1 |. The coefficient sits on [0, 1] where 0 is a frozen ranking and 1 is a complete takeover by new exporters within one year. Low values say the same origins hold position; high values say market share churns between countries from one year to the next.

How concentrated are different kinds of goods?

Rauch (1999, Journal of International Economics48(1): 7-35) distinguishes three product types by price-discovery mechanism: goods traded on organised exchanges (oil, wheat, copper), reference-priced goods (base chemicals, steel), and differentiated goods (machinery, apparel). Anderson & van Wincoop (2004, JEL 42(3): 691-751) connect that typology to trade-cost elasticities: homogeneous goods price in world markets, differentiated goods do not. A natural by-product is that exporter concentration should rise with homogeneity, fewer countries can profitably produce the unit good at scale. The figure below tests that: trade-weighted mean HHI within each Rauch class,1995-2024, across all HS6 products. This places the single HS 854231trajectory from Figure 1 against its class-wide benchmark.

How durable is the top-5 grip on this market?

HHI squares every exporter's share, so a moving HHI can reflect either a single dominant seller or many mid-sized ones reshuffling. The concentration ratio of the top-5 exporters (CR5) strips that ambiguity: it is simply the combined world-export share held by the five largest suppliers in a given year. Bain (1956, Barriers to New Competition, Harvard UP) introduced CRk as the workhorse concentration statistic for industrial organisation, and Curry & George (1983, Journal of Industrial Economics 31(3): 203-255) survey its use in applied trade and IO. A rising CR5 across 30 years means a tightening oligopoly of origins; a falling CR5 signals genuine entry by new suppliers below the top tier.

How many exporters effectively share this market?

HHI and CR5 both weight large players. A complementary read is the Theil entropy of exporter shares H_t = −Σ_i s_i,t ln s_i,t and its exponentiated form exp(H_t), the 'effective number of exporters' (Hill 1973, Ecology 54(2): 427-432; Jost 2006, Oikos113(2): 363-375). A market with five equal-share exporters has effective N = 5 regardless of how many tail-share exporters file customs returns. The gap between the raw exporter count and the effective count is the dominance gap; if a market gains tail entrants but the leader takes more share, raw N rises while effective N falls. Cadot, Carrère & Strauss-Kahn (2011, Review of Economics and Statistics 93(2): 590-605) use this transform on the demand side for export diversification; it reads symmetrically on the supply side here.

What this tells us

Market concentration for HS 854231 in 2024 sits at HHI = 1,171 on the 0-10,000 scale used by the DOJ/FTC Horizontal Merger Guidelines (2023). That is in the 1,000-1,800 moderately-concentrated band; the single top supplier accounts for 23% of global flows. When a dominant exporter holds this much of a line, a political or policy shock at that origin propagates directly into every downstream importer. The OECD geodep view in Figure 4 shows how that risk concentrates: 4 of the top-15 importers of this HS6 source more than 40% from a single origin, the conventional vendor-consolidation threshold beyond which diversification becomes a board-level decision (Baldwin & Freeman 2022).

How consultancies use this

• Sourcing-diversification mandates. For a client importing a concentrated HS6 the Figure 3 ranking is the shortlist of feasible alternates by share, landed distance, unit value, and tariff exposure.
• M&A and capacity-investment targets. Rising exporters in Figure 5 with small-but-growing shares are candidate build or acquisition geographies for supplier-network redundancy.
• CBAM- and sanctions-adjusted resilience reviews. Figure 4 flags importer countries whose single-source exposure to a carbon- or sanctions-sensitive origin compounds through the same HS6 into their downstream industries.

References

• Arjona, R., Connell, W., & Pisu, M. (2023). 'An analysis of international trade interdependencies.' OECD Economics Department Working Paper ECO/WKP 1775.
• Baldwin, R. (2012). 'Global supply chains: Why they emerged, why they matter, and where they are going.' CEPR Discussion Paper 9103.
• Baldwin, R., & Freeman, R. (2022). 'Risks and Global Supply Chains: What We Know and What We Need to Know.' Annual Review of Economics 14: 153-180.
• Bown, C. P. (2020). 'How the United States Marched the Semiconductor Industry into Its Trade War with China.' East Asian Economic Review 24(4): 349-388.
• Anderson, J. E., & van Wincoop, E. (2004). 'Trade Costs.' Journal of Economic Literature 42(3): 691-751.
• Fajgelbaum, P. D., & Khandelwal, A. K. (2022). 'The Economic Impacts of the US-China Trade War.' Annual Review of Economics 14: 205-228.
• Rauch, J. E. (1999). 'Networks versus markets in international trade.' Journal of International Economics 48(1): 7-35.
• Grossman, G. M., & Rossi-Hansberg, E. (2008). 'Trading Tasks: A Simple Theory of Offshoring.' American Economic Review 98(5): 1978-1997.
• Head, K., & Mayer, T. (2014). 'Gravity Equations: Workhorse, Toolkit, and Cookbook.' In Handbook of International Economics, vol. 4, ch. 3.
• Herfindahl, O. C. (1950). Concentration in the U.S. Steel Industry. PhD thesis, Columbia University.
• Hirschman, A. O. (1945). National Power and the Structure of Foreign Trade. University of California Press.
• US Department of Justice & Federal Trade Commission (2023). Horizontal Merger Guidelines.