by Robert Casanova, Director, Industry Statistics and Economic Policy
The Semiconductor Industry Association (SIA) today released its annual State of the Industry Report. The report highlights the current challenges facing the semiconductor industry, as well as opportunities for continued growth and innovation.
In 2023, the semiconductor industry’s importance to the world continues to grow, as chips become an even greater presence in the essential technologies of today—and give rise to the transformative technologies of tomorrow. In all, more than 1 trillion semiconductors were sold globally last year, a total so high that if you stacked them one on top of another, they would reach higher into the sky than the maximum cruising altitude for commercial aircraft.
As chip demand rises, countries around the world have been ramping up government investments to lure semiconductor production and innovation to their shores. In 2022, the U.S. government stepped up to meet this challenge, enacting the landmark CHIPS and Science Act to provide needed semiconductor research investments and manufacturing incentives. and reinforce America’s economy, national security, and supply chains.
Since the CHIPS Act was introduced, companies from around the world have responded enthusiastically, announcing dozens of new semiconductor ecosystem projects in the U.S. totaling well over $200 billion in private investments. These projects will create tens of thousands of direct jobs in the semiconductor ecosystem and will support hundreds of thousands of additional jobs throughout the U.S. economy. Implementation of the CHIPS Act has begun in earnest in 2023, and SIA seeks to play a constructive role to ensure the new law returns maximum benefits for America’s economy, national security, and supply chain resilience.
Although the future holds tremendous promise for the semiconductor industry, it also presents a range of challenges. U.S.-China tensions continue to impact the global supply chain, for example, spurring new government controls on sales of chips to China, the world’s largest semiconductor market. And other significant policy challenges remain, including the need to enact policies to reinforce U.S. leadership in semiconductor design, strengthen the U.S. semiconductor workforce by reforming America’s high-skilled immigration and STEM education systems, and promote free trade and access to global markets. In addition, while the global chip shortage has eased, macroeconomic headwinds and market cyclicality have caused a short-term downturn in sales, which is projected to linger throughout the year.
Despite these challenges, the long-term outlook for this foundational industry remains strong. That’s because moving forward, the world will need more and better semiconductors to power everything from appliances and airliners to autonomous cars and artificial intelligence. For society to advance, so too must chip technology.
In 2023, with effective government policies and continued hard work and ingenuity in our industry, the semiconductor sector will continue to grow, innovate, and build a brighter future for the world.
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