Navigating uncertainty: how tariffs, tech shifts, and geopolitics are reshaping supply chain priorities

From fluctuating U.S. tariffs to lifecycle shifts in memory, new forces are converging to reshape procurement priorities and operational strategies across the global supply chain.

Nearly halfway through 2025, the semiconductor industry is facing a dramatically altered risk landscape, marked by escalating geopolitical tensions and financial fragility. Each week brings a new challenge to the market, forcing organizations to adapt rapidly.

Regulatory compliance, lifecycle risk, and long-term availability have become strategic imperatives in 2025. While the global supply chain is not nearly as discombobulated as it had been during the pandemic, component obsolescence, financial health, and geopolitical realignment have given rise to concerns regarding uncertainty. Original equipment manufacturers (OEMs), contract manufacturers (CMs), and electronic manufacturing service (EMS) providers stand united in their attempts to maintain production stability.

Mounting pressure from U.S. tariff volatility

The inauguration of Donald Trump as United States President has rekindled tariff-related anxieties. Recent developments in U.S. trade policy have led to rounds of tariffs affecting numerous industries and countries. In March, semiconductor sales experienced a 19% year-over-year (YoY) increase, attributed to pre-tariff stockpiling. Tariffs on semiconductors are complex, due to the step

s required in manufacturing a single component.

Gartner analyst Cori Masters describes the tariff situation as a “complexity of madness.” As the number of tariffs can quickly be compounded on a single part throughout its production, as it travels from country to country to complete the next step in its process. Likewise, tariffs on critical minerals, such as aluminum, add another layer of regulatory red tape and tariff price adjustments. This has resulted in concerns that extend beyond U.S.-based organizations, as sourcing strategies and cost structures shift to adapt to these changes.

For procurement teams, these changes create a renewed need to forecast and manage trade exposure. Tariffs can instantly erode previously negotiated cost advantages, particularly for companies heavily reliant on products with Chinese certificates of origin (COOs). The reactive nature of political decision-making also makes long-term planning difficult.

Mitigation strategies are evolving. Some OEMs and EMS providers are shifting their focus to multi-region sourcing, working with suppliers to relocate production to Vietnam, Thailand, or Mexico. Others are building tariff-adjusted pricing models into their contracts or pursuing other strategies that defer or reduce duty liabilities. According to Gartner’s research, over 61% of organizations are diversifying their supplier base to mitigate component unavailability resulting from tariffs or demand elasticity.

At the strategic level, organizations are beginning to treat tariff shifts not as temporary speed bumps but as permanent variables in their total cost of ownership assessments. If tariffs become a staple of U.S. trade policy over the next three years, the global supply chain may undergo permanent reorganization.

Samsung’s DDR4 phase-out and AI constraints

Samsung, one of the largest suppliers of DRAM products in the market, has signaled its intention to phase out DDR4 production by the end of 2025. This marks a significant milestone in the industry’s transition toward DDR5, a next-generation memory standard that promises substantial performance and power efficiency gains.

However, this shift creates risk. DDR4 remains a mainstay in countless systems. Many OEMs have platforms that are not yet ready for DDR5, and they will need to make strategic purchasing decisions now to avoid future availability constraints or price spikes. Supply-demand imbalances are likely as buyers rush to secure last-time buys (LTBs). Micron Technology, one of the industry’s leading memory suppliers, is also unable to fill the market void in DDR4 left by Samsung. There are smaller memory producers, but they don’t yet possess a significant market share.

Samsung stated in a letter to customers that it will cancel orders or change existing ones. This gives organizations a short window to shift their strategies to find a new supplier or make an LTB. Experts warn that average selling prices (ASPs) for DDR4 are expected to increase by 12% to 14% in Q3. This is after a forecasted growth of 8% – 10% in Q2.

This situation is further complicated by the heightened demand for components used in artificial intelligence (AI) applications. Ongoing demand for AI has contributed to constraints across parts used in aligned verticals, including some memory. Analog ICs and memory chips were at the forefront in the recent pre-tariff buying surge, making their availability more scarce.

Gartner notes that the lead time for high-tech products is unlikely to see significant changes beyond an increase in length in the near term.

“If it’s not sitting in inventory stock or sitting in a warehouse, it’s not available,” said Masters. “Everyone’s already done their buy-ahead, and lead times will remain increased for the remainder of this year.”

Alon Balash, Senior Vice President, Revenue, at Sourceability, shared that Israeli companies may be more at risk of disruptions this year due to their small, high-mix, low-volume applications market. “The market often receives less attention and limited product allocation from semiconductor manufacturers and global distributors—especially during periods of extended lead times or product constraints.”

Balash continued, “This makes the local market more vulnerable to supply shortages and production disruptions, which can be both costly and time-consuming.”

Procurement’s response must go beyond short-term buying. Cross-functional collaboration among engineering, demand planning, and suppliers is essential to ensure alignment on transition timing and prevent stranded inventory. Establishing long-term supply agreements and diversifying suppliers by including smaller manufacturers outside of Tier 1 companies is imperative for maintaining stability despite disruptions.

The DDR4 phase-out also reflects a broader trend: the compression of product lifecycles. As technology evolves at a faster pace, procurement must become more agile in recognizing and planning for EOL (end-of-life) signals. Since the pandemic, the risk of instant obsolescence has increased as manufacturers prioritize more lucrative product lines.

Financial instability and geopolitical risks

Beyond market dynamics, internal vulnerabilities within the supply base are now a growing concern. Financial instability can jeopardize the continuity of supply, often with little warning. Company mergers also have the potential to risk the continuation of product lines as business priorities shift.

The announcement of Wolfspeed’s plans to file for Chapter 11 bankruptcy serves as a cautionary tale. For procurement leaders, it serves as a reminder that even Tier 1 suppliers can falter. Monitoring supplier financial health is becoming a standard risk mitigation practice. Some procurement organizations are even deploying internal “supplier health scorecards” that combine financial metrics with operational key performance indicators (KPIs), such as quality and responsiveness.

The issue with Wolfspeed’s bankruptcy is the significant shake-up it will have on the automotive industry. Automakers have become increasingly reliant on SiC products, and the only other source comes from Chinese manufacturers, which face mounting pressures from the ongoing U.S.-China trade war. Tariffs are only just scratching the surface.

Cori Masters shared that Wolfspeed and other SiC manufacturers, alongside the auto industry, face a double-edged sword. SiC suppliers need the automotive industry to expand, while the auto industry needs SiC products to power its new technology. However, SiC technology hasn’t been implemented enough to justify the cost at the moment. Likewise, automotive manufacturers are concerned about becoming overly reliant on Chinese manufacturers. With the loss of Wolfspeed, that would only heighten the risk.

However, Masters notes that Wolfspeed divested their GaN business in the fall of 2023 to MACOM. This deal included design resources and manufacturing, which means the intellectual property remains in the U.S., should it choose to become a competitor.

To build resilience, companies are increasingly favoring suppliers with diversified end markets. For procurement teams, this means navigating more complex bill of materials (BOM) structures, where compliance, supply chain security, and multi-region redundancy are of paramount importance. It’s not enough to know what you’re buying, but also where it’s made, who is making it, and what jurisdictions it touches across the supply chain.

Some organizations are accelerating “friendshoring” efforts—concentrating production in politically aligned regions—or investing in nearshoring strategies to bring critical manufacturing closer to end markets. Both approaches involve trade-offs in cost, capacity, and time-to-scale, but could offer greater long-term resilience. It just depends on which method provides greater benefits to the company.

For example, while TSMC’s most recent investment in Arizona avoids U.S. tariffs, the company is considering a 30% price markup. Organizations will need to weigh their choices before committing to a new supply strategy, even if it involves a domestic supplier.

Regarding Israel’s sector, Balash notes that “while the mil-aero sector remains dominant, other key segments—such as data communications, industrial, and non-invasive medical—should take proactive steps to strengthen supply chain resilience.”

This includes “expanding AVLs to include emerging suppliers that offer increased flexibility and attention, and blending sourcing strategies by combining official channels with reliable, traceable alternatives.”

Winning organizations in 2025 will be those that embed agility into their sourcing strategy, leveraging data, automation, and supplier collaboration to outpace volatility.

Above all, leaders must move from reactive risk management to proactive opportunity planning. The forces reshaping the supply chain are complex but predictable in one respect: disruption is now the norm. Strategic foresight and cross-functional execution will define the next era of procurement excellence.