Global Chip Sales Rose 6.5 Percent in 2020 After Year-End Rush: Report

Global semiconductor sales rose 6.5 percent overall in 2020, as a recovery during the last three months of the year helped offset a sharp dropoff in March and April, when pandemic stay-home orders rolled out around the world.

Global sales were $439 billion (roughly Rs. 32,08 lakh crores) in 2020, according to data from the Semiconductor Industry Association (SIA), a trade group that represents most US chipmakers along with many international firms. The group said sales from US chipmakers were about $208 billion (roughly Rs. 15,20 lakh crores), or about 47 percent of the total.

Chip sales into the United States were $94.15 billion (roughly Rs. 6,87 thousand crores), up 19.8 percent from the previous year.

Falan Yinug, SIA's director of industry statistics and economic policy, said much of the rise in US purchasing was driven by high-end memory chips used in applications such as data centers.

American tech companies such as Amazon.com, Microsoft and Alphabet's Google all saw dramatic rises in the use of cloud computing over the course of 2020 as businesses adapted to working from home.

While US-based companies represented nearly half of semiconductor sales, they represented only about 12 percent of chip manufacturing capacity in 2020. That is down from 37 percent in 1990, as most US companies now source their chips from factories in Asia.

John Neuffer, president and chief executive of the industry group, said legislation passed last year to provide incentives to chip factories in the United States could help change that figure this year. The law could provide funding to US companies such as Intel or GlobalFoundries, as well as foreign firms such as Samsung Electronics or Taiwan Semiconductor Manufacturing Company.

"Over the next 10 years, semiconductor manufacturing is going to grow 56 percent," Neuffer said. "We want to make sure we're getting a bigger piece of the manufacturing pie."

© Thomson Reuters 2021

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