Market Trends of United States Semiconductor Memory Industry
Recent Initiatives by the US Government to Drive the Market's Growth
- The United States has traditionally been among the leading consumer and producers of semiconductor chips. However, the last decade has witnessed a shift in the trend, with several US-based chipmakers shifting their production base to China due to cheap labor availability. However, the growing demand for semiconductor chips and the United States' ongoing dispute with China has forced the government to rethink its strategy and promote its local semiconductor industry ecosystem, creating a favorable outlook for the market's growth.
- Also, the decreasing share of US-based vendors in the global semiconductor design industry has forced the government to take several initiatives. For instance, according to the Semiconductor Industry Association, the share of US-headquartered vendors in the global semiconductor chip design industry is anticipated to decline to 36% by 2030, compared to 50% in 2000.
- For instance, in February 2024, the US government announced its intentions to invest over USD 5 billion in semiconductor-related R&D and workforce needs, including in the National Semiconductor Technology Center (NSTC), to advance the government's aim of driving semiconductor-related R&D in the United States.
- In recent years, the US government took several other initiatives, including bipartisan, to create helpful incentives to support the CHIPS Act of 2022, which aims to tackle some of the most significant manufacturing and innovation challenges of recent times. According to the government, the act will invest USD 50 billion through the Department of Commerce's CHIPS for America Fund to support the local semiconductor industry.
- According to the US Department of Commerce's National Institute of Standards and Technology, out of the allocated USD 50 billion for the CHIPS act, about USD 28 billion is anticipated to be spent on large-scale investments in leading-edge semiconductor manufacturing, while USD 10 billion is for new manufacturing capacity for mature and current-generation chips.
- Such initiative drives leading semiconductor companies to increase their investment in the country. For instance, in April 2024, SK Hynix announced its plan to invest USD 3.87 billion to establish its first chip packaging facility in the country. The facility is planned to start its operation in 2028.
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The Consumer Products Segment to Witness Significant Growth
- The United States is among the leading markets for consumer electronic products as the penetration of daily household consumer devices is high compared to developing regions. A larger size of a digitally aware consumer base, along with the availability of supporting infrastructure such as cellular/broadband connectivity, further supports this trend.
- In the United States, over 90% of the population has broadband. The US government has taken several initiatives to make broadband connectivity universal in recent years. For instance, in June 2023, the US government announced USD 42 billion in funding to be distributed among the nation's 50 states and US territories to make high-speed broadband accessible by 2030.
- In recent years, the proliferation of smart home devices has increased among US consumers. As smart home devices offer innovative features, they add significant value to the consumer's day-to-day life. According to the Consumer Technology Association (CTA), the revenue through the sales of emerging technology devices such as OLED TVs, portable gaming consoles, smart light bulbs, and augmented reality headsets/eyewear in the United States was anticipated to reach USD 8.6 billion in 2023 in the United States, compared to USD 5.1 billion in 2021.
- Wearable technology is also witnessing significant growth in the consumer segment as devices such as smartwatches and smart glasses, among others, have gained widespread acceptance across various consumer segments. Hence, the growing demand for wearable devices is also expected to support the market's growth. For instance, according to CTA, the sales of wearable devices in the United States were anticipated to reach USD 13.8 billion in 2023, compared to USD 7.7 billion in 2018.
