North America analog semiconductor market was evaluated at US$13.421 billion for the year 2020, growing at a CAGR of 4.34%, reaching a market size of US$18.063 billion by the year 2027.
Analog and digital semiconductor devices make up the majority of the semiconductor business. Temperature, speed, sound, and electrical current are all "real world" functions analog semiconductors condition and control. North American companies hold a significant share of the analog semiconductor market. This is one of the primary reasons why American semiconductor companies, trade organizations, and the government are pushing for more local chip manufacturing. With the recent introduction of government policies like the CHIPS for America Act and FABS Act, the analog semiconductor market is anticipated to increase in Northern America. However, the current trade war between the US and China has created disagreements among semiconductor firms and is expected to slow down production and revenue.
The recent outbreak of the novel coronavirus disease had a positive impact on the analog semiconductor market. Despite the COVID-19 pandemic's uncertainty in demand, the worldwide market rose significantly in 2020. Most medical equipment used in hospitals and doctors' offices today employ semiconductors, including many that are crucial in the treatment of COVID-19 patients. Semiconductors are required to operate any medical gadget that can be plugged into an electrical outlet or contains batteries. According to SIA, the medical end-use industry accounted for $5.6 billion in total semiconductor sales in 2019, accounting for around 11% of the worldwide industrial semiconductor market and 1.3 percent of the entire semiconductor market. Medical semiconductors are increasing at a higher rate than the rest of the industrial semiconductor sector.
The COVID-19 pandemic emphasized the relevance of information and communication technology (ICT) in assisting critical operations in a crisis, as well as the role of an ever-expanding spectrum of digital services, ranging from commerce to education to healthcare, in establishing a resilient society. The semiconductor industry in the United States has one of the highest rates of R&D as a proportion of sales of any industry in the country. The Cybersecurity and Infrastructure Agency (CISA) of the Department of Homeland Security has published national advice that includes the semiconductor sector in its inaugural list of "important critical infrastructure employees." Semiconductors have also been classified as a business that may continue to operate by the state governments of California, Pennsylvania, and New York.
Since semiconductor manufacturing has been designated as a national security issue, improved domestic chip production could help ease the burden of geopolitical events affecting the electronics supply chain or, in the case of the current chip shortage affecting the market, if another global event like COVID-19 occurs.
Alliance of semiconductor companies
Intel, Micron, Analog Devices, and MITRE Engenuity have recently announced an agreement in principle to speed up semiconductor research, development, and prototyping to build a more robust US semiconductor industry, promote advanced manufacturing in the US, and protect intellectual property in the face of increased global competition. The Semiconductor Alliance, led by MITRE Engenuity, was formed in 2021 as a result of working groups, and its principles were published in a paper titled "American Innovation for American Growth," which summarised the Alliance's call to action for a fair and objective National Semiconductor Technology Center (NSTC).
According to Ann Kelleher, executive vice president and general manager of Technology Development at Intel Corporation, the semiconductor sector in the United States is at a junction. There has never been a more critical time for the industry to join together and chart a course ahead for advancing the foundation of innovation that will tackle the nation's most pressing problems. The Semiconductor Alliance is an open partnership that will leverage present and future R&D expenditures by businesses and governments across the United States, as well as support the spirit of the CHIPS for America Act to re-establish American leadership in the semiconductor sector.
Introduction of government policies
Considering other nations' governments have invested aggressively in chip manufacturing opportunities, the US government diverged from it. According to the Semiconductor Industry Association (SIA), the United States' share of contemporary semiconductor manufacturing capacity has declined from 37% in 1990 to 12% in recent times.
Congress acknowledged the importance of the semiconductor sector in America's future by establishing the CHIPS for America Act in the FY 2021 National Defense Authorization Act (NDAA). On June 8, 2021, the United States Senate made a big step toward this aim by approving the U.S. Innovation and Competition Act (USICA) (S.1260), which contains $52 billion in federal expenditures for the CHIPS Act's domestic semiconductor research, design, and manufacturing elements. On Feb. 4, 2022, the House of Representatives passed competitiveness legislation known as the America COMPETES Act, which contains $52 billion in CHIPS Act funding. Now, the House and Senate must work together to approve joint competitiveness legislation that includes CHIPS Act investments and is signed into law by President Biden.
According to a study by SIA and Oxford Economics, as new semiconductor manufacturing facilities, or fabs, are developed, robust federal incentives for domestic chip manufacturers would create approximately 200,000 American employments yearly and add nearly $25 billion to the US economy. SIA accounts for 99% of the U.S semiconductor industry’s revenue and nearly two-thirds of non-US chip firms. SIA also recorded an increase of 43.2% in sales, year-over-year in February 2022 in the Americas (North and South).
Furthermore, The Semiconductor Industry Association (SIA) revealed that the worldwide semiconductor industry sales in February 2022 were $52.5 billion, up 32.4 percent over February 2021's $39.6 billion and 3.4 percent higher than January 2022's $50.7 billion.
Implications of US-China Trade war
Despite the worldwide collaboration that drives the semiconductor processes, companies are nonetheless exposed to supply chain interruptions caused by international trade conflicts. The current trade war between the United States and China is causing concern among semiconductor companies, as tariffs and political talks endanger production and delivery systems.
In the field of semiconductor production, American and Chinese interests overlap. Tariffs imposed by the United States on Chinese imports have increased the cost of semiconductor materials and devices. The semiconductor sector is concerned that if the trade war continues, China may decide to restrict or ban rare earth metal exports to the United States, severely limiting the semiconductor industry's capacity to make components. China, which is now a significant semiconductor importer, intends to build its own chip design and manufacturing business. The Chinese government has said that by the end of 2020, it plans to provide 40% of its own semiconductors, with a longer-term objective of attaining 70% indigenous chip manufacture by 2025.
Texas Instruments Incorporated
Qualcomm Technologies Inc
Skyworks Solutions Inc
Infineon Technologies AG
Microchip Technology Inc
Renesas Electronics Corporation
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