Semiconductor Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 715 semiconductor manufacturers in the US design and build a variety of semiconductor and related solid-state devices including integrated circuits, memory chips, microprocessors, diodes, transistors, and solar cells. Semiconductors are used in a wide range of products, but major categories include computers and electronic devices, machinery, appliances, transportation equipment, solar panels, and lighting equipment.

Rapid Technology Innovation

Semiconductor manufacturers spend significant amounts of cash on research and development to meet customer demand and stay ahead of competition.

Shrinking Nodes, Fewer Labs

The number of cutting-edge semiconductor manufacturers is shrinking as fewer firms have the financial resources needed to further miniaturize semiconductors.

Industry size & Structure

A typical semiconductor manufacturer operates out of a single location, employs 280 workers, and generates about $71 million annually.

    • The semiconductor manufacturing industry consists of about 715 companies which employ about 200,000 workers and generate about $51 billion annually.
    • Customer industries include manufacturers of computers and electronic devices, telecommunications equipment, machinery, appliances, transportation equipment, solar panels, and lighting equipment.
    • The industry is highly concentrated with the 20 largest firms representing 78% of industry revenue.
    • Large companies include Intel, Global Foundries, Cypress Semiconductor, IBM, and Texas Instruments.
                                  Industry Forecast
                                  Semiconductor Manufacturers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Nov 14, 2023 - Firms Increase Prices
                                  • Semiconductor manufacturers modestly increased their prices in the first nine months of 2023 in response to slowly rising consumer demand for their products. Industry employment decreased slightly during the period while wages for nonsupervisory employees increased moderately.
                                  • The US Department of Commerce announced restrictions on the sale of advanced artificial intelligence (AI) chips to China. Federal officials say that the new rules are intended to close loopholes that surfaced after restrictions on AI chip exports went into effect in 2022. The earlier restrictions banned the sale of the Nvidia H100, which is the processor of choice for US AI firms like OpenAI. Chinese companies were instead able to buy a slightly slowed-down version called the H800 or A800 that complies with US restrictions, primarily by slowing down an on-device connection speed, called an interconnect. The new rules will ban those chips as well, senior administration officials said. The restrictions could also affect chips sold by Intel and AMD. Other rules may affect the sale and export to China of semiconductor manufacturing equipment from companies such as Applied Materials, Lam and KLA. Some experts say that the restrictions cut off a big and growing market for AI semiconductors and could raise concerns that the Chinese government will retaliate economically against US firms doing business in the country.
                                  • The US semiconductor industry could face a shortage of about 70,000 to 90,000 workers over the next few years, according to a report from professional services Deloitte. Skilled workers and those with advanced technical degrees are choosing to work at big technology firms instead of manufacturing facilities, according to the report. Management consulting firm McKinsey has projected a shortage of 90,000 skilled technicians in the US by 2030.
                                  • The semiconductor industry needs to adopt sustainable water practices to maintain its growth and competitiveness as water scarcity and environmental regulations becoming more pressing, according to Blaise Manga Enuh, Ph.D. Biotechnology and Biosafety. The industry faces significant risks from water scarcity and quality issues that can disrupt production and increase costs, but it also has a responsibility to support the United Nations Sustainable Development Goals, Enuh said. Firms are responding by reducing water consumption, recycling water, using alternative water sources, and improving wastewater treatment. Some companies that have successfully implemented water recycling systems include TSMC, which reused 42.3 million tons of industrial reclaimed water in 2019, accounting for 67% of its total water consumption. NXP has recycled 1.8 million cubic meters of water, representing 18% of its total water consumption, by installing water recycling systems at its manufacturing sites.
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