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 720 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.

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.

Rapid Technology Innovation

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

Industry size & Structure

A typical semiconductor manufacturer operates out of a single location, employs 258 workers, and generates about $71 million annually.

    • The semiconductor manufacturing industry consists of about 720 companies which employ about 185,900 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

                                  Mar 3, 2023 - Restrictions Announced For Chipmakers That Receive Federal Funding
                                  • Semiconductor manufacturers that receive money from a $39 billion federal fund created to build a leading-edge US semiconductor industry must agree not to expand capacity in "foreign countries of concern" for a decade, according to new US Department of Commerce rules. Commerce Secretary Gina Raimondo stressed that the department would be implementing safeguards to ensure the program was not abused. She added that companies which received funding must not “knowingly engage in any joint research or technology licensing effort with a foreign entity of concern that involves sensitive technologies or products.” Companies would also have to agree to other restrictions, including a prohibition on using the money for share buybacks or dividend payments.
                                  • The US has convinced the Netherlands and Japan to join it in expanding a ban on exports of chip-making technology to China, according to Bloomberg. The two countries have agreed to ban transfers of some slightly older deep ultraviolet lithography (DUV) equipment to China. Larger, older microchips made with DUV equipment are mostly used across the auto and the industrial sector, while newer chips like the ones used in Apple’s latest iPhones are made using EUV machines. The US has already banned exports to China of artificial intelligence hardware, such as graphical processing units (GPUs), tensor processing units (TPUs) and other advanced application-specific integrated circuits (ASICS), and the latest extreme ultraviolet lithography (EUV) equipment used to make them, and the Dutch government has followed suit. The Netherlands is home to ASML, the only manufacturer of EUV tools.
                                  • IT giant Apple will buy processors from a Taiwanese Semiconductor Manufacturing Company (TSMC) factory in Arizona, , according company CEO Tim Cook. Apple currently sources all of its processors from factories in Taiwan. It designs its own chips and Taiwan Semiconductor Manufacturing Company manufactures the A-series and M-series processors that power iPhones and Mac computers. Construction of the main chip facility in Arizona was completed in August, with production scheduled to begin in 2024. TSMC said in November that it is planning a second chip factory in Arizona because of "strong customer demand."
                                  • Several semiconductor manufacturers have instituted hiring freezes and layoffs, slashed capital spending plans, reduced factory output, and warned of a stark reversal in their customers’ buying habits. Mobile-phone chip maker Qualcomm said in early November 2022 that it is cutting spending in some areas and pausing hiring after giving a pessimistic outlook for its current quarter. Intel said in late October 2022 that it plans to lay off an unspecified number of employees as part of a plan to reduce costs by as much as $10 billion a year by 2025. The company also said that it will run some factories less aggressively and, while it moves forward on building plants due to come online in a few years, it will defer some of the most costly equipment spending until demand warrants them. Advanced Micro Devices said that it is being cautious about hiring given slumping demand.
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