New Report Highlights Strength of U.S. Semiconductor Industry and Continued Challenges
September 29, 2021 | SIAEstimated reading time: 2 minutes
The Semiconductor Industry Association (SIA) released its annual State of the Industry Report examining the U.S. semiconductor industry’s current global position, as well as challenges to — and opportunities for — continued industry growth and innovation. This comes as Congress considers critical legislation to invest in domestic semiconductor manufacturing, design, and research, and it follows last week’s White House meeting with industry leaders to discuss the ongoing global chip shortage.
The U.S. semiconductor industry has maintained its global market share leadership (47 percent of the global market) and has kept steady its high investment in research and development ($44 billion in 2020). The report underscores, however, that the U.S. industry and its position as a global innovation leader face myriad challenges. Most notably, the industry continues to grapple with a widespread global semiconductor shortage brought on by unpredictable and increased demand resulting from the COVID-19 pandemic, as well as a decreasing share of global front-end fab capacity fueled by incentives and subsidies provided by foreign governments that far outstrip similar incentives in the U.S.
“As the report highlights, America’s economy, national security, tech leadership, and response to COVID-19 are built on semiconductors,” said John Neuffer, SIA president and CEO. “To remain competitive on the global economic stage and ensure more of the chips our country needs are researched, designed, and produced on U.S. shores, Congress and the White House must act swiftly to fund the semiconductor provisions in the CHIPS for America Act.”
Other key findings from the report include:
- Despite the uncertainty in demand caused by the COVID-19 pandemic, the global market grew substantially in 2020, and the outlook is strong for the remainder of 2021 and beyond.
- For some business model subsegments, the U.S. industry lags its Asian-based competitors.
- Industry R&D expenditures are consistently high, reflecting the inherent link between U.S. market share leadership and continued innovation.
- The U.S. semiconductor industry maintains one of the highest levels of R&D as a percentage of sales of any U.S. industry.
- U.S. semiconductor manufacturing capacity has significantly decreased as a share of global capacity.
Throughout the past year, technologies built on semiconductors have kept the gears of the global economy, healthcare, and society writ large spinning. To ensure continued U.S. leadership in the global semiconductor industry, however, the report demonstrates the need for an ambitious competitiveness and innovation agenda. The Senate has passed legislation (USICA) that provides $52 billion in funding for the necessary semiconductor provisions in the CHIPS for America Act, and now the House must follow suit and send legislation to the president to be signed into law.
To complement the federal manufacturing grants and research investments authorized by the CHIPS for America Act, SIA has also called on leaders in Congress to enact an investment tax credit for semiconductor manufacturing and research. A combination of grants, tax credits, and research investments is needed to turbocharge U.S. semiconductor production and innovation. Congress is considering legislation called the FABS Act that would establish a semiconductor investment tax credit. The FABS Act should be expanded to include expenditures for both manufacturing and design to help strengthen the entire semiconductor ecosystem.
Suggested Items
America Projected to Triple Semiconductor Manufacturing Capacity by 2032, the Largest Rate of Growth in the World
05/08/2024 | SIAThe Semiconductor Industry Association (SIA), in partnership with the Boston Consulting Group (BCG), released a report on the global chip supply chain that projects the United States will triple its domestic semiconductor manufacturing capacity from 2022—when the CHIPS and Science Act (CHIPS) was enacted—to 2032.
Real Time with… IPC APEX EXPO 2024: ASMPT and Technica's Successful Partnership and Future Plans
05/08/2024 | Real Time with...IPC APEX EXPONolan Johnson speaks with Frank Medina and Jeff Timms about the fruitful collaboration between ASMPT and Technica and the upcoming launch of a machine with enhanced capabilities. They also discuss partnerships with semiconductor firms, customer demo plans, and the significance of the demo center. The conversation highlights the potential in North America.
Q1 Global Semiconductor Sales Increase 15.2% YoY
05/07/2024 | SIAThe Semiconductor Industry Association (SIA) announced worldwide sales of semiconductors totaled $137.7 billion during the first quarter of 2024, an increase of 15.2% compared to the first quarter of 2023 but 5.7% less than the fourth quarter of 2023.
Worldwide Silicon Wafer Shipments Dip 5% in Q1 2024
05/07/2024 | SEMIWorldwide silicon wafer shipments decreased 5.4% quarter-over-quarter to 2,834 million square inches in the first quarter of 2024, a 13.2% drop from the 3,265 million square inches recorded during the same quarter last year, the SEMI Silicon Manufacturers Group (SMG) reported in its quarterly analysis of the silicon wafer industry.
ZESTRON Academy Launches 2024 Advanced Packaging & Power Electronics Webinar Series
05/01/2024 | ZESTRONZESTRON, the leading global provider of high-precision cleaning products, services, and training solutions in the electronics manufacturing and semiconductor industries, proudly announces the launch of its highly anticipated webinar series on Advanced Packaging & Power Electronics, a webinar series on the latest innovations, cleaning, and corrosion challenges.