Chip Industry Rebounded in 2020 as Lockdown Fueled Demand

(Bloomberg) -- The semiconductor industry grew 6.5% in 2020, fueled by demand for technology to support work and study from home in the pandemic, according to new figures from the Semiconductor Industry Association.

Total sales were $439 billion, the SIA said in a statement. China was again the largest consumer of the electronic components, with its market growing 5% to $152 billion. The Americas region surged 20% to $94 billion. Sales into Europe dropped 6%.

Semiconductor makers benefitted from employers and parents buying laptops and other devices for remote work. Beneath that positive trend, though, geopolitical fissures continued to stress the global technology supply chain.

U.S. companies accounted for 47% of total sales last year, maintaining the country's status as home to the biggest chip companies. But the amount of manufacturing in the U.S. continues to decline. Just 12% of chip production was done in U.S. factories in 2020, down from 37% in 1990.

“That disparity will only intensify without U.S. government action to level the global playing field,” SIA Chief Executive Officer John Neuffer said. “It's imperative the federal government fully fund incentives for domestic chip manufacturing and investments in chip research so the U.S. can benefit from growing demand and produce more semiconductors needed to strengthen our economy, national security and critical infrastructure.”

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The chip industry has become ensnared in the trade war between China and the U.S. Beijing has vowed to spend more than $160 billion to create a domestic semiconductor sector and limit the ability of the U.S. to hammer companies such as Huawei Technologies Co. with supply limits in the name of national security.

This tension has highlighted how much U.S. chipmakers use outsourced manufacturing, primarily to Taiwan Semiconductor Manufacturing Co. Located on an island just off the coast of the mainland that Beijing says is a rebel province, TSMC's factories are a key component in the worldwide supply chain relied on by companies such as Apple Inc., Qualcomm Inc. and Nvidia Corp

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