TAIPEI --The CEO of Qnity, a leading supplier of semiconductor chemicals and materials, says a "local-for-local" strategy, including sourcing more than 70% of raw materials within each region where it operates, is key to growing its business as chipmakers shift and shorten supply chains.

"Our belief in that local-for-local operating model and being that partner of choice is to allow us to accelerate the pace of innovation and match the speed of our customers," Jon Kemp, Qnity chief executive, told Nikkei Asia in an interview.

"We have found that the best way to do that is to co-locate innovation with our customers, and that allows us to go through and accelerate the development process, and really allows us to earn their trust and to have a seat at the design table with them for their most advanced technology." In the past, most industry players believed the most efficient model was to concentrate manufacturing in just a few locations and to supply customers globally. But rising geopolitical tensions, the COVID-19 pandemic, conflict in the Middle East and tariff changes in the past few years have prompted a paradigm shift, making chipmakers and their suppliers increasingly aware that localizing the production of critical materials is essential to strengthening supply chain resilience.

Kemp said Qnity's diversified manufacturing footprint and local sourcing had given it a "tremendous advantage," creating new business opportunities and making it a more reliable partner for global clients.

"It's not just about investing in our own manufacturing; we also invest in our entire supply chain ... we buy 70% or more of all of our raw materials in a country or in the region," the CEO said.

Semiconductor materials are moving to center stage and their advances make them a "hidden hero" of the AI era, says Qnity CEO Jon Kemp.

"Because of this well-built-out footprint, where we have capabilities in so many regional geographies, we've been able to pick up opportunities," Kemp said. He added that the "local-for-local" operating model also helped minimize the impact of global inflation, as many price hikes were tied to logistics.

U.S.-headquartered Qnity, a former DuPont electronics business and a key supplier to Taiwan Semiconductor Manufacturing Co, Samsung and Intel, is known for its leading position in many chemical mechanical polishing (CMP) materials used in the chipmaking process, including CMP pads and slurries as well as for other key materials for advanced chip packaging and thermal management. The company was spun off by DuPont and listed on the U.S. Nasdaq exchange last November. Its stock price has risen around 45% this year, buoyed by the AI boom.

Qnity recently invested $61.5 million to increase production capacity for advanced chip materials and chemicals in Taiwan, while also expanding in South Korea and maintaining a sizable production presence in China. Southeast Asia is becoming an important electronics manufacturing hub as well, according to the CEO. Qnity has doubled its capacity in Vietnam.

Major chipmakers such as TSMC are seeking closer collaboration with materials suppliers while pushing for more localized supply chains, creating opportunities for a new generation of materials and equipment companies in the region.

Earlier this year, Qnity opened a new facility in its home state of Delaware, primarily to support the growth of U.S. chipmaking capacity, particularly for cutting-edge processors and memory chips. About half of Qnity's 40 manufacturing sites are in Asia, with the other half in the U.S.

"Our facilities are always used as much as possible to support the local countries in the region, but it also gives us tremendous agility and resilience from a supply chain point of view," Kemp said.

The CEO added that its CMP-related business had grown 20% this year, while materials for advanced packaging, AI-related printed circuit boards and thermal management applications all grew more than 50% year over year in the first half of 2026.

Kemp, a chip industry veteran, said AI demand was reshaping the use and adoption of new materials, with advanced ones increasingly needed not only in chipmaking, but also in chip packaging and across entire electronics systems to boost computing performance.

"Materials are moving kind of from backstage to center stage," Kemp said. "Materials innovation is a hidden hero of the AI era."

He added: "The explosion of advanced packaging and thermal management, and the need for collaboration and leveraging of technology across the entire stack, from the front end all the way to the back end. It's happened much faster than we ever imagined."

The global semiconductor materials market is set to grow from $73.2 billion in 2025 to be worth $92 billion in 2027, according to the semiconductor materials industry alliance, Semi.

Doris Hsu, chair of GlobalWafers, one of the world's leading silicon wafer makers and Semi's chair, says the materials industry is "entering a golden era, shifting from a supporting role to becoming increasingly essential to technological advances across a wide range of applications. From hidden champions to real champions."