Global chip sales is expected to remain strong in 2021 but also challenging and will require bold actions from the government for US to capitalize on them, a senior executive of the semiconductor industry said on Thursday.
In 2020, industry sales for the year ticked up 6.8% from the 2019 total, reaching US$440 billion, John Neuffer, president and CEO of the US’ Semiconductor Industry Association (SIA), wrote on his contributing piece on EE Times.
“Looking ahead to the long-term, rising demand for personal technology and chip-powered devices will cause the semiconductor market to continue to grow in the years ahead. In addition to personal devices and servers, the long-term applications of semiconductors __ including AI, 5G, autonomous cars, and clean energy __ are quickly gaining steam,” the CEO said. In 2021, sales are expected to rise by 8.4% from a year ago, Neuffer wrote.
But the CEO warned that, without bold action from the US government, other nations will be better positioned to take advantage of this uptick.
Governments of competing countries have recognized the “strategic importance” of semiconductors and have been investing “boldly in chip manufacturing and research for years,” Neuffer said. In contrast, the US government did not offer significant chip manufacturing incentives, and “federal investments in semiconductor research have been flat as a share of GDP,” the president said.
Neuffer said building and operating a new semiconductor fab costed 25% to 50% more in the US as other countries offered government incentives that significantly cuts costs for companies. Unless there is “bold action” by the US government, manufacture of chips to meet growing demand will happen outside of the US, he said. Share of global fab capacity in the US has fallen from 37% to 12% over the past 30 years, Neuffer said.
On Wednesday, US President Joe Biden signed an executive order for a 100-day review of supply chains to address the current global chip shortage.
He also said his administration will aim to secure US$37 billion budget for the CHIPS for America Act, a law proposed by US Congressman and House Foreign Affairs Committee Lead Republican Michael McCaul to promote and provide incentives for semiconductor production, research and develop on US soil.