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.
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 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
Recent Developments
Mar 19, 2024 - Firms Decrease Prices
- Semiconductor manufacturers slightly decreased their prices during 2023, according to the US Bureau of Labor Statistics (BLS). Industry employment decreased slightly during 2023 while wages for nonsupervisory employees increased significantly, according to the BLS.
- Global semiconductor chip sales, led by artificial intelligence (AI) chips, will increase 13% in 2024 to the highest level on record, according to Deloitte. The market for AI chips has grown from close to zero in 2022 to a projected $50 billion in 2024 and could account for half of the entire chip market by 2027. One of the key questions for semiconductor manufacturers is who will fill the jobs that are expected to be created by increasing sales. Roughly 67,000 of the 115,000 US new semiconductor jobs that the Semiconductor Industry Association (SIA) is projecting by 2030 risk going unfilled, according to the industry trade group. Most of the potentially unfilled jobs are for technician and engineer roles that typically require as little as a certificate or two-year degree and as much as a master's or Ph.D., according to the SIA. Community colleges and universities across the country have partnered with semiconductor companies to prevent a worker shortage.
- Venture Capital (VC) investment in the semiconductor industry decreased in 2023 to a total of $10.3 billion from 2022's $12.8 billion and 2021’s peak of $16.1 billion, according to PitchBook. The decrease may have been part of the broader VC downturn, according to Pitchbook, but market challenges including higher interest rates, supply-demand cycles, competitive pressures, and talent shortages persist. This downturn could be mitigated by a changing policy landscape. The CHIPS Act’s primary focus is on semiconductor manufacturing funding, for example, but $11 billion allotted for R&D also includes investment funds to support startups. Furthermore, the trend toward regional supply chains poses both challenges and opportunities, particularly for smaller companies in the materials and manufacturing equipment sectors.
- 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.
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