Semiconductor Industry, 2008

U.S. Market Overview

Since the 1990s, the trend towards global semiconductor competition has accelerated. Costs and risks for creating new semiconductor technology and production capacity have expanded rapidly, while the capabilities of competitors worldwide have increased as well. Firms compete globally to gain economies of scale in logistics, marketing, purchasing and production, and to recover the rising costs of developing technology. According to industry data, the worldwide semiconductor market was approximately $256 billion in 2007, of which the U.S. market was $43 billion, or 17 percent of the total.

Semiconductor products and process technologies are increasingly complex and interdependent, diffusing across firms and borders at rapid rates. The U.S. semiconductor industry has become global through overseas patenting, licensing, direct forms of technology transfer, international investment, acquisitions, alliances, mergers, and market strategies. Companies increasingly compete by creating networks of alliances with other firms – both foreign and domestic – as well as with universities, Federal laboratories, and other organizations in the United States.