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Above: A look inside Intel's massive Hillsboro, Oregon microprocessor facility. Source: Intel Corp
5 MIN. READ
Have you bought a new car lately? How about a new cell phone, toothbrush, or thermostat? Have you noticed that the price of most electronics has skyrocketed? Some of the increase can be blamed on inflation. But most of it comes from a wafer-thin silicon chip engraved with coding that is many times thinner than a strand of hair — a semiconductor.
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So why doesn’t the U.S. simply produce more chips? The answer is not simple, but it boils down to time and money. At the moment, China tops the list of semiconductor manufacturers. This situation is bad for U.S. manufacturers that rely on semiconductors. It is bad for national security. And it is costly for consumers who end up paying more for an electric toothbrush.
Supply Chain Disruption
As mentioned, China owns the semiconductor market. Before COVID, few manufacturers voiced concern that a main part of their final product came from China. The current semiconductor shortage shows the risks of relying on overseas production.
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One issue is the lack of shipping containers headed back to China. As the U.S. trucking industry struggles to move goods from port to warehouse, fewer containers are available to load. Chinese manufacturers then don't have the containers they need. Also, COVID fears closed the world's third- and fourth-largest shipping ports for months, both of which are in China.
Further, Chinese manufacturing companies suffer from the same issue as U.S. manufacturing. They lack a viable worker pipeline. With closed borders and an aging workforce, China struggles to find the workers needed to make as many products as it could.
Legislation
The CHIPS for America Act is part of the current National Defense Authorization Act. It will provide $52 billion to research, design and make semiconductors in America. Depending on how its funds are used, the CHIPS for America Act may be the start of a national manufacturing policy.
MNI, compiler and publisher of industrial business profiles for the U.S. manfuacturing sector, recently collected new data on the semiconductor manufacturing industry and found 741 related companies nationwide that employ 158,546 workers. In response to the shortage, this figure is 5.02% higher than last year. Average sales ran $175,738,849,969 for 2020.
CHIPS’ effect on the international semiconductor sector will change the state of imports and exports. The data shows that 20% of semiconductor manufacturers import raw materials, compared to only 11% of all manufacturers. Also, 75% of U.S. semiconductor manufacturers sell their product around the world, compared to only 29% of all manufacturers.
In the U.S., 49% of semiconductor manufacturing companies are located in the West. The Northeast runs a distant second with 22% of manufacturers. The South follows with 19% of the total. The Midwest claims the remaining 10%.
Related: Key Facts & Trends in the U.S. Electronic & Electrical Equipment Industry
| Company | City | State | Number of Employees |
|---|---|---|---|
| Intel Corp. | Hillsboro | OR | 19,300 |
| L3Harris Technologies, Inc., ISR Systems | Greenville | TX | 5,500 |
| QUALCOMM, Inc. | San Diego | CA | 5,279 |
| Amkor Technology, Inc. | Tempe | AZ | 5,000 |
| NXP Semiconductors USA, Inc. | Austin | TX | 5,000 |
| GLOBALFOUNDRIES, Inc. | Hopewell Junction | NY | 4,000 |
| Samsung Austin Semiconductor, LLC | Austin | TX | 3,500 |
| Enphase Energy | Petaluma | CA | 2,500 |
| Advanced Micro Devices, Inc. | Santa Clara | CA | 2,000 |
| Analog Devices, Inc. | Milpitas | CA | 2,000 |
Intel Corp., based in Hillsboro, Ore., manufactures processors, systems and devices, chipsets, wireless products and other computer system items. With 19,300 employees, the company innovates in the semiconductor sector.
L3Harris Technologies Inc., ISR Systems, operates in Greenville, Tex., with 5,500 employees. Based in Majors Airport, this plant focuses on semiconductors for aerospace and military use. L3Harris understands the security risk of trusting the semiconductor supply chain to a foreign competitor.
QUALCOMM Inc. in San Diego, Calif., employs 5,279 people. In 1985, the company’s founders knew they wanted to focus on quality communications products. QUALCOMM now runs the largest satellite-based commercial mobile system for the transportation sector.
Amkor Technology Inc., is housed in Tempe, Ariz. Its 5,000 employees work on automotive semiconductor innovations such as LIDAR. LIDAR sensors provide safe, effective autonomous driving. This advance reduces the number of car accidents due to driver error.
NXP Semiconductors USA Inc. in Austin, Tex., splits its 5,000-person workforce between several semiconductor industries. NXP works in the automotive, mobile communications, infrastructure and industrial technology sectors.
GLOBALFOUNDRIES Inc. calls Hopewell Junction, NY, home. It is one of only a few U.S. companies that can fill large-scale semiconductor orders. The 4,000 GLOBALFOUNDRIES employees create innovative, feature-rich chips.
Samsung Austin Semiconductor LLC is in Austin, Tex. Its 3,500 employees focus on the company’s mission to provide a quality, agile supply chain of semiconductors to all its U.S. clients.
Enphase Energy calls Petaluma, Calif., home. The company’s 2,500 workers create semiconductors for the solar industry. Working at a molecular level, Enphase simplifies solar energy, making it effective and affordable.
Advanced Micro Devices Inc. in Santa Clara, Calif., employs 2,000 people. The company combines work and play. It creates upscale gaming systems and virtual reality systems for realistic educational experiences.
Analog Devices Inc., located in Milpitas, Calif., employs 2,000 people. Analog Devices works in aerospace and defense, industrial automation, healthcare and other areas. It provides digital-to-analog converters, optical communications, processors and other industrial products.
Semiconductor manufacturers build parts that are crucial to the technologies we need both now and in the future. Looking to contact manufacturers in the semiconductor or electrical equipment industry? An IndustrySelect subscription provides clients with touch-point data for potential leads, including direct executive contact information and other actionable data among 460,000 industrial companies -- including semiconductors. To learn more about how you can use IndustrySelect to generate reliable leads for your company, visit our website or start your free demo.