Semiconductor & Other Electronic Component Manufacturing

Brief Excerpt from Industry Overview Chapter:

Companies in this industry make semiconductors (computer chips) and other components used in most electronic devices. Major US companies include Intel, Jabil Circuit, Texas Instruments, and Samsung Electronics America. Top international manufacturers include Samsung Electronics of South Korea, Sharp Corporation of Japan, and Flextronics International of Singapore.

Worldwide semiconductor sales are about $300 billion a year, according to the Semiconductor Industry Association. The Asia/Pacific region accounts for 55 percent of semiconductor sales, followed by the Americas (18 percent), Japan (15 percent), and Europe (12 percent).

The US semiconductor and electronic component manufacturing industry consists of about 4,300 companies with combined annual revenue of about $120 billion. The industry is expected to grow at a high rate in the next two years, driven by the proliferation of consumer electronic products such as smartphones and tablets.

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 industry is highly concentrated: the 50 largest companies generate about 65 percent of revenue.

Exports and imports account for a large portion of industry volume. About 35 percent of US production is exported; imports make up about 40 percent...