First Research US Industry Profile

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Semiconductor & Other Electronic Component Manufacturing
SIC Codes: 3671, 3672, 3674, 3675, 3676, 3677, 3678, 3679
NAICS Codes: 3344
Last Quarterly Update: 5/27/2019
Companies in this industry make semiconductors (computer chips) and other components used in electronic devices. Major companies include Broadcom, Intel, Micron Technology, and Qualcomm (all based in the US), along with Samsung Electronics and SK Hynix (both of South Korea), Taiwan Semiconductor Manufacturing Company, and Toshiba (Japan).
Global semiconductor sales total nearly $470 billion a year, according to World Semiconductor Trade Statistics. The Asia/Pacific region accounts for about 60% of semiconductor sales, followed by the Americas (20%), Japan (10%), and Europe (10%).
The US semiconductor and electronic component manufacturing industry consists of about 3,900 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $88 billion.
Competitive Landscape
The industry depends highly on demand from the computer industry and makers of telecommunications products such as cell phones, which can vary sharply from year to year. Companies can be successful producing standard parts at low cost or by producing highly specialized components. Small companies can compete effectively with large ones by producing specialized products or developing new applications. Technological expertise is extremely important. The US industry is concentrated: the 50 largest companies generate about 60% of revenue.
US makers of semiconductors and other electronic components face competition from producers in other countries; at the same time, many US producers enjoy strong international sales. About 65% of US production is exported; imports make up about 75% of the US market. The high value and low weight of electronic components makes transportation costs negligible in many cases.
Competitive Advantages:
Specialization - The proliferation of internet-connected device (commonly referred to as the internet of things, or IoT) has diversified the semiconductor industry. Smaller companies compete with industry leaders by addressing specialized requirements (low power consumption, durability, etc.) for specific end markets such as automotive or utilities.
Talented Engineers - Semiconductor designers are among the highest-paid electrical engineers, and companies compete to attract experienced engineers with proven track records.
Access to Capital - Companies that perform their own manufacturing and testing require large investments in equipment and facilities.
Companies to Watch:
Intel vies with fellow integrated manufacturer Samsung for top spot among semiconductor makers. The inventor and leading seller of x86 microprocessors that power the majority of personal computers, Intel offers a vast array of semiconductor products.
Nvidia is one of the largest fabless semiconductor companies. Traditionally focused on add-on boards for gaming, the company has used its expertise in graphical processing units (GPUs) to become a leader in the fields such as artificial intelligence and self-driving cars.
Taiwan Semiconductor Manufacturing Company (TSMC) is the largest pure-play foundry, accounting for more than half of the market for contract chip manufacturing.
Products, Operations & Technology
Major products include semiconductors (computer chips), which account for about half of industry revenue; printed circuit assemblies (20%); and components ... plus:
Sales & Marketing
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Finance & Regulation
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Regional & International Issues
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Human Resources
Also includes the following chapters:
Quarterly Industry Update
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Industry Indicators
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Business Challenges
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Trends and Opportunities
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Call Preparation Questions
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Financial Information
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Industry Forecast
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Industry Websites
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Glossary of Acronyms

Historical Profiles (PDF format)

02/11/2019
11/12/2018
08/13/2018
05/14/2018
02/12/2018
10/30/2017
07/03/2017
03/27/2017
12/19/2016
09/12/2016
06/13/2016
03/21/2016
12/14/2015
09/07/2015
06/08/2015
03/09/2015
12/08/2014
09/15/2014
06/23/2014
03/31/2014
01/06/2014
09/30/2013
07/08/2013
04/15/2013
01/14/2013
10/08/2012
07/23/2012
04/30/2012
01/30/2012
10/17/2011
07/18/2011
03/28/2011
12/20/2010
09/20/2010
06/21/2010
03/08/2010