As national issues intrude further into the economic sphere, electronics manufacturers are creating new and flexible structures that involve changes to their manufacturing and supply chain systems.

Adaptive supply chain. Mark the phrase. It may not appear new to electronics veterans who have lived through many of the market’s turbulent cycles, but adaptive supply chain is making a comeback as economic and geopolitical events outside the control of the industry continue to heavily impact activities within the sector. At all levels throughout the supply chain, companies are reacting to ongoing massive disruptions with innovative actions designed to insulate their operations against negative pressures and ensure they can continue to operate with minimum disruptions. Industry executives and analysts say steps being taken by enterprise leaders to restore calm include the redesign and introduction of multiple supply chain systems, differentiated product management structures, localized production and component sourcing, enlargement of supplier networks, manufacturing reshoring and strategic scenario planning. “In 2025, supply chains are no longer just operational engines—they’ve become strategic assets,” said Vishrut Srivastava, founder and managing director of Yodaplus, a technology services company, in a report. “This transformation isn’t just about efficiency; it’s about resilience, agility, and intelligence. Businesses are moving away from rigid, linear models and toward adaptive ecosystems—powered by real-time data, predictive analytics, and interconnected platforms.” 

The technology landscape has certainly changed dramatically from what it was a few years ago. Economic nationalism and geopolitical issues have risen across the globe and political leaders are trying to achieve their objectives by introducing legislation, rules and regulations that have altered how companies engage with distributors, suppliers, and customers, whether consumers or enterprises. The electronics industry has been heavily impacted by these actions. Companies involved in the production and sale of advanced electronics devices, for example, have had restrictions imposed on their sales activities by home governments. Nvidia Corp. and Advanced Micro Devices, for example, now require export licenses for the sale of their leading artificial intelligence processors and systems to certain countries, including China. The imposition of tariffs on many countries by the Trump administration has also forced a rethink of how manufacturing systems and supply chains are structured around the globe, experts said. Analysts said companies are also seeing implications for their product development and other technology innovation activities. 

Companies throughout the electronics industry are responding to the evolving landscape with a variety of strategies. In the distribution market, the leading vendors are racing to add suppliers, beefing up their product lines with a widening range of components and providing technical information to keep customers engaged and informed. The expansion of line cards in the components distribution market, for example, provides a certain level of insulation against restrictions on the sale of components made in some countries or regions to customers in other parts of the world. A broader line card can also help companies secure engagements with customers for new products introduction (NPI) activities. DigiKey, for instance, has been building its NPI services with the addition of more than 100 new suppliers in the first quarter of this year, leading to nearly 100,000 NPI engagements, the company said. “We are thrilled to keep adding cutting-edge suppliers and products to our line card to offer engineers and innovators all the parts and solutions they need for everything they design,” said Mike Slater, vice president of global business development for DigiKey, in a statement. “The notable additions we made to our product and supplier portfolios in the first three months of this year are directly linked to the strong customer activity we experienced in the first quarter.”

Speaking and acting

Electronics industry executives have avoided taking a stance on the tit-for-tat tariffs announced in the first months of 2025, leaving the task of articulating their views to industry bodies. “Uncertainty is much higher now because there’s still a lot of unknowns when it comes to translating what was released by the White House into what actually needs to be implemented within supply chains,” said Shawn DuBravac, chief economist at IPC. Analysts said reactions have varied from reshoring of production facilities to the localization of production. “The re-emergence of tariffs as a primary economic tool— especially among major economies such as the United States, China, and the European Union — is reshaping international commerce,” said Austin Samuel, a semiconductor analyst. 

Companies in the electronics industry are adapting to geopolitical tensions, tariffs, and supply chain disruptions with a mix of regionalization, AI-driven forecasting, and sustainable manufacturing practices. The key strategies they’re employing include regionalization and production reshoring. Intel and TSMC have been expanding fab capacity in the U.S. and Europe to reduce dependency on Asian semiconductor production. OEMs are getting involved, too. Apple and Dell are shifting parts of their supply chain away from China to India and Vietnam for assembly and component sourcing. STMicroelectronics, on the other hand, said it would deploy a “China-for-China” production system that involves the localization of manufacturing services in the communist country for devices it expects to sell locally. ST executives said the strategy would enable them to remain competitive in China while avoiding many of the pressures they would otherwise face from European and American regulators. “If we cede our market share in China to another company working in the industrial or automotive sector, Chinese companies will dominate their market,” said ST CEO Jean-Marc Chéry. “With such a large domestic market, this would provide them an excellent platform to compete in other countries.”  

The concept behind this strategy is to maintain a competitive edge in every region, according to Fabio Gualandris, head of manufacturing at ST. Producing chips outside China alone would mean missing out on China’s rapidly advancing EV development cycle, he said. The development of a partnership with Hua Hong, which ST is collaborating with at China’s second-largest foundry to produce 40nm microcontroller chips in Shenzhen by the end of 2025, and a silicon carbide joint venture in Chongqing with San’an Optoelectronics, focusing on power chips for EVs, will help ST achieve its goals. “ST has chosen quite an innovative way to strengthen its Chinese operations: become Chinese in China,” said Jean-Christophe Eloy, founder and president of semiconductor researcher Yole Group, in a report. Companies like ST are maintaining a manufacturing presence in China because of the large OEM base in the country, which in 2024 accounted for “25% of the $27.5 billion microcontroller global revenue and 33% of the 30.6 billion MCU shipments globally from all suppliers, including local,” Yole said.