2021 - Semiconductor Industry Association

1 2021. FACTBOOK. Semiconductor Industry Association . FACTBOOK. Introduction The data included in the 2020 SIA Factbook helps demonstrate the strength 1. Increase investments in Semiconductor research to discover the next and promise of the Semiconductor Industry and why it is critical for generation of Semiconductor technologies. policymakers to enact measures that boost growth and promote innovation. 2. Strengthen America's technology workplace by retaining the best and The Semiconductor Industry is a key driver of America's economic brightest scientific minds from around the world and increasing the number of strength, global competitiveness, and technology leadership. American STEM graduates.

2 Semiconductors enable the systems and products that we use to work, 3. Facilitate open markets to fuel semiconductors Industry growth. communicate, travel, entertain, harness energy, treat illness, and make new scientific discoveries. Semiconductors make possible the global trillion dollar 4. Develop targeted export controls to protect national security while also electronics Industry . Semiconductors were invented in America, and the allowing Semiconductor companies to compete in the global market. still leads the world in cutting-edge manufacturing and design . 5. Promote sustainability practices and innovation with regulations that In the Semiconductor Industry and across the broader tech sector, innovation is meet the needs of the Semiconductor Industry .

3 Made possible through the hard work and ingenuity of the Industry 's scientists 6. Reduce the risk of counterfeit semiconductors through enforcement and and engineers and is supplemented by smart public policy from the federal government- Industry partnerships. government. At SIA, a common theme of the policies we support is that all of them are intended to maintain and accelerate technological advancements. 7. Advance innovation by protecting valuable intellectual property, The federal government plays a vital role in furthering these initiatives. including balanced patent reform and increased protection of trade secrets. To help promote innovation and ensure America's continued technology 8.

4 Ensure a globally competitive tax system to enhance America's leadership, policymakers should do the following: competitiveness, boost design and manufacturing, and promote American innovation. PREFACE - i - FACTBOOK. List of Figures (Page Numbers in Parentheses). (1) SECTION 1: Industry OVERVIEW. (2) The Global Semiconductor Industry is a Key Growth Sector in the Global Economy (3) The Semiconductor Industry has Nearly Half the Global Market Share (4) Semiconductor Company Sales have Displayed Steady Annual Growth (5) Semiconductor Companies Maintain Market Share Leadership in Major Regional Semiconductor Markets (6) The Vast Majority of Semiconductor Manufacturing Done in the United States is Done by Firms (7) The Semiconductor Industry Maintains More of its Manufacturing Base in the United States than in Any Other Country (8) The Semiconductor Industry Adds New Capacity Globally (9) Semiconductors are One of America's Top Exports (10) SECTION 2: GLOBAL MARKET.

5 (11) Global Semiconductor Sales are Driven by Products Ultimately Purchased by Consumers (12) Global Semiconductor Sales are Diversified by Type of Product Sold (13) Asia Pacific is the Largest Regional Semiconductor Market, and China is the Largest Single Country Market (14) SECTION 3: CAPITAL AND R&D INVESTMENT. (15) Total Annual Levels of Investment in Capital and R&D are High for the Industry (16) Capital and R&D Investment are Critical to Maintaining a Competitive Semiconductor Industry (17) Investment in Capital Expenditures and R&D per Employee is Very High for the Industry , Reaching $176,000 in 2020. (18) Semiconductor Industry R&D Expenditures are Consistently High, Reflecting the Inherent Importance of R&D to Semiconductor Production (19) Annual R&D Expenditures as a Percent of Sales have Exceeded 10 Percent Over the Past 20 Years, Among the Highest Rates for any Industry (20) The Semiconductor Industry is a Leader in R&D Spending as a Percent of Sales Among Major Industries (21) The Semiconductor Industry Spends More on R&D as a Percent of Sales than any Other Country's Semiconductor Industry (22) The Semiconductor Industry is Highly Capital Intensive, and Annual Industry Spending on Capital Equipment Tends to be High as a Share of Sales (23)

6 Annual Capital Expenditures as a Percent of Sales have Average Between 10 and 15 Percent Over the Past 20 Years (24) SECTION 4: JOBS. (25) The Semiconductor Industry Accounts for a Quarter of a Million Direct Jobs and Over a Million Additional Indirect Jobs (26) SECTION 5: PRODUCTIVITY. (27) Semiconductor Firms have Experienced Rapid Improvements in Productivity Over the Past 20 Years PREFACE - ii - Section 1. Industry OVERVIEW. Section 1: Industry Overview - 1 - SECTION 1: Industry OVERVIEW. THE GLOBAL Semiconductor Industry IS A KEY GROWTH SECTOR IN THE GLOBAL ECONOMY. Worldwide Semiconductor sales increased from $ billion in 2000 to $ billion in 2020, a compound annual growth rate of percent per year.

7 According to the World Semiconductor Trade Statistics (WSTS) Fall 2020 Semiconductor Industry Forecast, worldwide Semiconductor Industry sales are forecasted to reach $469 billion in 2021 and $496 billion in 2022.*. *WSTS, Fall 2020 Semiconductor Industry Forecast 500. 450. Global Semiconductor Sales ($Billion). 400. 350. 300. 250. 200. + 19/'20. 150. 100. 50. 0. '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20. Source: World Semiconductor Trade Statistics (WSTS) and SIA Estimates. Section 1: Industry Overview - 2 - SECTION 1: Industry OVERVIEW. THE Semiconductor Industry HAS NEARLY HALF THE GLOBAL MARKET SHARE. The Semiconductor Industry experienced a significant loss in global The Industry rebounded over the next 10 years, and by 1997, it had market share during the 1980s.

8 In the early 1980s, producers held regained its leadership position with over 50 percent global market share, a more than 50 percent of worldwide Semiconductor sales. Due to intense position the Industry continues to hold today. Semiconductor firms have competition from Japan-based firms, the effect of illegal "dumping , as well as maintained their competitive edge in microprocessors and other leading-edge a severe Industry recession in 1985 to 1986, the Industry lost a total of devices, as well as having continued to lead in a range of other product nineteen worldwide market share points, and it had ceded global Industry areas. In addition, Semiconductor firms maintain a leading position in market share leadership to the Japanese Semiconductor Industry .

9 R&D, design , and process technology. Today, firms have the largest market share with 47 percent. Other countries' industries have between 5 and 20 percent global market share. 60 2020. 47%. 50. 40. 30 Korea 20%. 20 Japan EU. 10% 10% Taiwan 7% China 10. 5%. 0. '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20. Source: SIA, World Semiconductor Trade Statistics (WSTS), Omdia Section 1: Industry Overview - 3 - SECTION 1: Industry OVERVIEW. Semiconductor COMPANY SALES HAVE DISPLAYED STEADY ANNUAL GROWTH. Sales by headquartered Semiconductor firms grew from $ billion in 2000 to $ billion in 2020 -- a compound annual growth rate of percent.

10 Sales growth for headquartered companies shows the same cyclical fluctuations characterized by the Industry as a whole. 250. 200. Industry Semiconductor Sales ($Billion). 150. 100. + 19/'20. 50. 0. '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20. Source: World Semiconductor Trade Statistics (WSTS) and SIA Estimates. Section 1: Industry Overview - 4 - SECTION 1: Industry OVERVIEW. SEMICODUCTOR COMPANIES MAINTAIN MARKET SHARE LEADERSHIP IN MAJOR REGIONAL. Semiconductor MARKETS. In 2020, Semiconductor firms based in the United States held percent of the total Semiconductor market, the most of any country's Semiconductor Industry . In all major country and regional Semiconductor markets, headquartered companies also held sales market share leadership.