The U.S. should adopt “smart policies” to eliminate or reduce “vulnerabilities” in the global semiconductor supply chain “and enhance the U.S. economy, national security, and supply chain resilience,” the Semiconductor Industry Association told the Commerce Department’s Bureau of Industry and Security. Comments due Monday in docket BIS-2021-0011 will help shape recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve supply chain bottlenecks (see 2103110054). Though “geographic specialization” in semiconductor production “served the industry and its consumers well, it has also created potential vulnerabilities in the global value chain,” said SIA. The industry features more than 50 “points” across the value chain “where one region holds more than 65% of the global market share,” it said. About three-quarters of global chip manufacturing capacity is concentrated in China and East Asia, “a region significantly exposed to high seismic activity and geopolitical tensions and lack of fresh water and power,” it said: Virtually all the world’s “highly advanced” semiconductor manufacturing capacity is based in Taiwan (92%) and South Korea (8%). The global value chain features “single points of failure” susceptible to “natural disasters, infrastructure shutdowns, or geopolitical conflicts and may cause large-scale interruptions in the supply of essential chips,” said SIA. “Geopolitical tensions may result in trade restrictions that impair access to crucial providers of essential technology, unique raw materials, tools, and products that are clustered in certain countries.” The association fears those restrictions could result “in a significant loss of scale and compromising the industry’s ability to sustain the current levels of R&D and capital intensity needed to maintain the current pace of innovation.” The smart policies the U.S. government will need to deploy to mitigate the multiple vulnerabilities should include “targeted investments to fill high-risk gaps,” plus collaborating with “allies and partners globally to strengthen supply chains,” said SIA. “The semiconductor industry needs targeted government policies and incentives.” The U.S. government should work through existing “multilateral and plurilateral forums,” including the World Trade Organization and the Organisation for Economic Co-operation and Development, “to coordinate key semiconductor supply-chain related issues,” it said: Supply-chain resilience, cybersecurity, joint R&D, export controls, intellectual property protection, subsidies and market access barriers should top the list of priorities. SIA urged a U.S. goal of achieving “a more diversified geographical footprint by building additional semiconductor and unique raw material manufacturing capacity in the U.S. and expanding the production sites and domestic sources of supply for unique and critical materials.”
The U.S. should adopt “smart policies” to eliminate or reduce “vulnerabilities” in the global semiconductor supply chain “and enhance the U.S. economy, national security, and supply chain resilience,” the Semiconductor Industry Association told the Commerce Department’s Bureau of Industry and Security. Comments due Monday in docket BIS-2021-0011 will help shape recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve supply chain bottlenecks (see 2103110054). Though “geographic specialization” in semiconductor production “served the industry and its consumers well, it has also created potential vulnerabilities in the global value chain,” said SIA. The industry features more than 50 “points” across the value chain “where one region holds more than 65% of the global market share,” it said. About three-quarters of global chip manufacturing capacity is concentrated in China and East Asia, “a region significantly exposed to high seismic activity and geopolitical tensions and lack of fresh water and power,” it said: Virtually all the world’s “highly advanced” semiconductor manufacturing capacity is based in Taiwan (92%) and South Korea (8%). The global value chain features “single points of failure” susceptible to “natural disasters, infrastructure shutdowns, or geopolitical conflicts and may cause large-scale interruptions in the supply of essential chips,” said SIA. “Geopolitical tensions may result in trade restrictions that impair access to crucial providers of essential technology, unique raw materials, tools, and products that are clustered in certain countries.” The association fears those restrictions could result “in a significant loss of scale and compromising the industry’s ability to sustain the current levels of R&D and capital intensity needed to maintain the current pace of innovation.” The smart policies the U.S. government will need to deploy to mitigate the multiple vulnerabilities should include “targeted investments to fill high-risk gaps,” plus collaborating with “allies and partners globally to strengthen supply chains,” said SIA. “The semiconductor industry needs targeted government policies and incentives.” The U.S. government should work through existing “multilateral and plurilateral forums,” including the World Trade Organization and the Organisation for Economic Co-operation and Development, “to coordinate key semiconductor supply-chain related issues,” it said: Supply-chain resilience, cybersecurity, joint R&D, export controls, intellectual property protection, subsidies and market access barriers should top the list of priorities. SIA urged a U.S. goal of achieving “a more diversified geographical footprint by building additional semiconductor and unique raw material manufacturing capacity in the U.S. and expanding the production sites and domestic sources of supply for unique and critical materials.”
The U.S. should adopt “smart policies” to eliminate or reduce “vulnerabilities” in the global semiconductor supply chain “and enhance the U.S. economy, national security, and supply chain resilience,” the Semiconductor Industry Association told the Commerce Department’s Bureau of Industry and Security. Comments due Monday in docket BIS-2021-0011 will help shape recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve supply chain bottlenecks (see 2103110054).
The Commerce Department should be careful not to place unilateral export restrictions on semiconductors and should invest heavily in domestic chip innovation, technology companies told the agency in comments due this week. But at least one think tank urged Commerce to pursue more strict controls and argued that decoupling from China along the semiconductor supply chain is inevitable.
February semiconductor revenue increased 14.7% year on year, reaching $36.9 billion globally, but was down 1% from January sales of $40 billion, reported the Semiconductor Industry Association Monday. “Global semiconductor sales during the first two months of the year have outpaced sales from early in 2020, when the pandemic began to spread in parts of the world,” said SIA CEO John Neuffer. “Sales into the China market saw the largest year-to-year growth, largely because sales there were down substantially early last year.”
February semiconductor revenue increased 14.7% year on year, reaching $36.9 billion globally, but was down 1% from January sales of $40 billion, reported the Semiconductor Industry Association Monday. “Global semiconductor sales during the first two months of the year have outpaced sales from early in 2020, when the pandemic began to spread in parts of the world,” said SIA CEO John Neuffer. “Sales into the China market saw the largest year-to-year growth, largely because sales there were down substantially early last year.”
February semiconductor revenue increased 14.7% year on year, reaching $36.9 billion globally, but was down 1% from January sales of $40 billion, reported the Semiconductor Industry Association Monday. “Global semiconductor sales during the first two months of the year have outpaced sales from early in 2020, when the pandemic began to spread in parts of the world,” said SIA CEO John Neuffer. “Sales into the China market saw the largest year-to-year growth, largely because sales there were down substantially early last year.”
Industry will need to invest about $3 trillion over the next decade in R&D and capital spending globally across the value chain “to meet the increasing demand for semiconductors” that's causing severe shortages across multiple industries, concluded a new Semiconductor Industry Association report prepared with Boston Consulting Group and released Thursday. “Industry participants and governments must collaborate to continue facilitating worldwide access to markets, technologies, capital, and talent, and make the supply chain more resilient.” Government action, in the form of financial incentives and subsidies, “is needed to address vulnerabilities in the global semiconductor supply chain and ensure its long-term strength and resilience,” it said.
Commerce Department Secretary Gina Raimonndo said she had a “productive” meeting with the Semiconductor Industry Association last week and agreed that the U.S. should push for “strong investments” in domestic semiconductor manufacturing and innovation. “Semiconductors are America’s fourth largest export, and critical to our economic competitiveness and national security,” Raimondo said in a March 19 statement, adding that the meeting with SIA’s board of directors is the beginning of an “ongoing dialogue” between Commerce and industry leaders. “[O]ver the years we have underinvested in production and hurt our innovative edge, while other countries have learned from our example and increased their investments in the industry,” Raimondo said. “As Secretary of Commerce, combatting the semiconductor shortage and investing in American manufacturing of semiconductor technology is going to be a priority of mine.”
January semiconductor sales increased 13.2% globally from a year earlier to $40 billion, and were up 1% sequentially from December, reported the Semiconductor Industry Association Monday. “Global semiconductor production is on the rise to meet increasing demand and ease the ongoing chip shortage affecting the auto sector and others, and annual sales are projected to increase in 2021,” said SIA CEO John Neuffer. Year-on-year sales in the Americas were up 15.4% in January, second only to Asia Pacific (up 16%), said SIA. Month-on-month sales were down 3% in the Americas and 1% in Japan but up by single digits in all other regions, it said.