New SIA Report Highlights Industry’s Strength and Looming Challenges

Thursday, Jun 18, 2020, 12:00pm

by Falan Yinug, Director, Industry Statistics and Economic Policy


As policymakers in Washington consider legislation to invest in U.S. semiconductor manufacturing and research, a new SIA report provides context on the U.S. semiconductor industry’s global position across a variety of metrics, including market share, manufacturing, and technology competitiveness. The 2020 State of the U.S. Semiconductor Industry report demonstrates that while the U.S. industry currently leads the world in semiconductors, it also faces a range of challenges to its leadership position in an ever-changing policy landscape.

[DOWNLOAD THE 2020 STATE OF THE U.S. SEMICONDUCTOR INDUSTRY REPORT]

The report shows the U.S. semiconductor industry has maintained its global market share leadership and has kept steady its very high levels of investment in research and development and capital expenditure, even though annual worldwide sales decreased in 2019. These industry investments have sustained U.S. leadership in semiconductor innovation. U.S. companies are also leaders in 5G technology and have developed virtually all the advanced semiconductors relevant for AI and big data, which power everything from supercomputers to internet data centers.

The report, however, makes clear the U.S. industry faces a range of challenges. First, the COVID-19 pandemic has upended the global economy and disrupted worldwide supply chains, causing significant near-term market uncertainty. Second, the rising cost of innovation for semiconductor manufacturing and design, particularly at the leading edge, continues to pose challenges. Third, while the U.S. remains the global leader in semiconductor design and R&D, the lion’s share of chip manufacturing is now occurring in Asia, and that trend is projected to continue over the next decade. Finally, global geopolitical instability, especially regarding trade policy, is forcing the U.S. industry to consider how to remain competitive in a world of unforeseen uncertainty and policy constraints. The U.S. semiconductor industry relies on its deep global supply chains and access to overseas markets.

Semiconductors are essential to America’s economy, national security, and response to COVID-19 and future crises. The 2020 State of the U.S. Semiconductor Industry report underscores how important – but also how challenging – it will be for the U.S. semiconductor industry to continue to lead the world in this critical technology.