Six years ago, the outlook for U.S. semiconductor manufacturing was dim and dimmer. At the time, Intel was building their Dalian fab, AMD was ramping up their Dresden facilities, TI was transitioning to a fab-lite model, and the U.S.-based fabless giants were growing their business through foundries based in Asia. It was common for people to see semiconductors like other manufactured goods, inevitably moving to Asia, just another example of merciless globalization.
Today, the outlook for U.S. semiconductor manufacturing couldn’t be more promising.
The United States has rebounded to become once again one of the largest and fastest growing regions of the world for semiconductor manufacturing. In 2007, the percentage of equipment spending for chip manufacturing in the US had dropped to 15%, an all-time low. Today, the U.S. market represents over 20% of world equipment spending with promising expectations for continued growth. U.S. fabs and their supply chains are now seen as leading a high-tech manufacturing renaissance, and no less than the President of the United States has taken notice. Earlier this month, President Barack Obama visited Applied Materials in Austin, saying, “We’ve got to do everything we can to help the kind of high-tech manufacturing that you’re doing right here at Applied.”
Leading this rebound are chip giants Intel and GLOBALFOUNDRIES, but robust equipment and material spending will also occur at Micron, TI, Samsung, and Maxim. This year, Intel will spend up to $3.5 billion, primarily at their Fab 42 in Arizona and Dx1 Fab in Oregon; and GLOBALFOUNDRIES will invest $1.2-$1.8 billion on equipment at their new fab in New York. Samsung will spend $1.8 to $2.5 billion to increase capacity at their Austin facility by 60%. In addition, Micron, CNSE (NanofabX for G450C), IBM, and Maxim may collectively spend up to $1.5 billion in equipment this year. Over $8 billion will be spent in equipment in the U.S. in 2013, nearly as much as South Korea and well over double the spending in China, Europe, or Japan. Spending will further increase in 2014.
In materials, we project that spending will increase 3% in North America to $4.85 billion. This number is overwhelmingly dominated by front-end materials, as back-end operations are mostly located in Asia. In photomask materials, for example, the U.S. represents approximately 20% of the world’s demand.
The renaissance in semiconductor manufacturing is good for the industry, SEMI members and the U.S. economy. According to the latest Bureau of Labor Statistics data, the semiconductor industry has added jobs three times faster than the rest of the U.S. economy in 2011. The semiconductor industry’s manufacturing workforce grew by 3.7% over the previous year, while jobs throughout the broader U.S. economy increased by 1.2% over the same time period. And semiconductor industry jobs have an enormous ripple effect on the broader U.S. economy. As reported by the SIA, the semiconductor industry’s employment multiplier figure (number of jobs beyond direct industry employment) is higher than that of the construction industry (1.90), the communications industry (2.52), and the automobile industry (4.64), among many others.