Shipping finished chips is far more cost effective than shipping raw materials.

It's also worth noting that the now infamous "chip shortage" for vehicles has a built-in complication you don't hear much about. The chips that are short are frequently holdover designs from the 2000's. Qualifying a component for use in a car, especially one that is operational or safety-critical (like these chips are), is an extensive and expensive process.

You know how every now and then your phone or PC locks up and you need to reboot it? Would kinda suck if your car did that. So the chips that go into things like cars and planes are performance and stress tested out the wazoo. Which means once a chip gets qualified, they don't like to change it due to the time and expense of qualification testing.

Whether it's updating the design to new technology or even just moving production to a new facility...any change requires a re-qualification. So we tend to build cars with really old chip designs. And very few suppliers are willing to hold production equipment, designs, and processes from twenty years ago static even though that is what automakers want. That means the whole industry is hostage to just a couple of producers in China.