SIA warns U.S. chip design market share to plunge

The U.S. share of chip design revenue will drop to 36 percent by the end of this decade from 46 percent in 2021 and over 50 percent in 2015, without government support, according an analysis by U.S. industry body Semiconductor Industry Association (SIA) and Boston Consulting Group.
US semiconductor design share forecast
The United States has lost its lead in chip manufacturing, prompting the Joe Biden administration to pass the CHIPS and Science Act this year. An earlier report by SIA and BCG in 2020 showed the U.S. share of modern global chip manufacturing capacity had fallen to 12 percent by that year, down from 37 percent in 1990.

The United States has been a leader in microchip design with dominant companies like Nvidia, Intel and Qualcomm.

While US technology companies like Intel both design and manufacture chips, fabless chipmakers like Nvidia and Qualcomm design chips that are made by the likes of Taiwan Semiconductor Manufacturing (TSMC).

The report also said government support is helping companies in countries like China and South Korea to gain market share in chip designing as well.
Top semiconductor firms in 2020
It said federal investment in semiconductor design and R&D of $20 billion-$30 billion through 2030, including a $15 billion-$20 billion investment tax credit for chip design, would be needed to maintain U.S. leadership in the long-run.

While the CHIPS and Science Act included $39 billion in manufacturing grants for chip production and $13 billion for R&D, nothing was tagged for chip designing specifically, according to a spokesperson for SIA.

The report said the U.S. chip industry will face a shortage of 23,000 design workers by 2030, but funding from the federal government could help support training up a workforce.

EU-funded European Processor Initiative to design and build a family of high-performance, low-power processors The EU’s European Chips Act seeks to reinforce Europe’s capacity to innovate in the design, manufacture, and packaging of advanced chips.

India Government approved a $600 million Design Linked Incentive program for semiconductors, providing preferential tax treatment for design activities.

China’s National Integrated Circuit Investment Fund invests $3 billion in design Revamped stock market rules to establish STAR Market, on which fabless firms have raised over $50 billion through IPOs.

South Korea’s Government pledged $1.3 billion over ten years for AI and power chip design.

Taiwan Government will provide $300 million over seven years for semiconductor R&D.

Tax incentives offered for semiconductor design and R&D vary in countries: 25.8 percent in China, 25 percent in South Korea, 17.6 percent in Europe, 15 percent in Taiwan, 14.8 percent in Japan, 9.5 percent in the United States and 8.2 percent in India.

Latest

More like this
Related

UNISOC unveils T760 chipset in India, targeting 5G smartphone business

Semiconductor design firm UNISOC announced the launch of its...

MediaTek vs Qualcomm in 5G smartphone chip market

The latest report from Omdia has revealed the chipset...

MediaTek intros Dimensity 7300 targeting gaming and AI smartphone makers

MediaTek has introduced the Dimensity 7300 and the Dimensity 7300X...

Arm Holdings Unveils New AI-Optimized Chip Designs and Software Tools

Arm Holdings has announced the release of new chip...