Semiconductor Industry, 2007

U.S. Market Overview

Since the 1990s, the trend towards global semiconductor competition has accelerated. Costs and risks for creating new semiconductor technology have expanded rapidly, while the capabilities of the competition have increased as well. Firms compete not only in their home market, but globally, to gain economies of scale in logistics, marketing, purchasing and production, and to recover the rising costs of developing technology. According to industry analysts, the global semiconductor market was approximately $247.7 billion, of which the U.S. market represented $40 billion or 16 percent of the total.

Semiconductor products and process technologies are increasingly complex and interdependent, diffusing across firms and borders at rapid rates. The U.S. semiconductor industry has become global through overseas patenting, licensing, direct forms of technology transfer, international investment, alliances, and strategies. Firms compete by creating networks of alliances with other firms--both foreign and domestic--as well as with universities, Federal laboratories, and other organizations in the United States.