Revenue is expected to increase due to declining prices and greater outsourcing activity.
New York, NY (PRWEB) June 22, 2014
Semiconductors are a core component of electronic devices and form a vital part of products ranging from electronic devices and systems (e.g. computers, cell phones and televisions) to solutions and services (e.g. internet providers, telecommunications and broadcasting services). The Semiconductor and Circuit Manufacturing industry is one of the top export industries in the US and according to the Semiconductor Industry Association (SIA), directly employs 250,000 Americans.
In 2014, semiconductor manufacturers are expected to generate $80.4 billion in revenue, with industry revenue expected to increase at an annualized rate of 5.1% in the five years to 2014. According to IBISWorld Industry Analyst Darryle Ulama, “Much of this growth is a recovery from the industry's dismal performance in postrecessionary 2009.” Revenue is expected to decrease 2.0% in 2014, as demand for US-made semiconductors lessens due to more efficient and lower-cost alternatives produced abroad. Since 2012, production outsourcing and price reductions have hampered revenue growth. Emerging countries have siphoned semiconductor manufacturers away from the US through industrial policy, tax incentives and high-tech corridors with low-cost labor. For example, downstream demand from domestic computer manufacturing fell at an annualized rate of 18.3% in the five years to 2014, reducing revenue for domestic semiconductor and circuit manufacturers.
In the five years to 2019, IBISWorld projects industry revenue to remain stagnant due to declining prices and greater outsourcing activity. “The average unit-selling prices of comparable products will continue to decline and players will increasingly outsource semiconductor and related-device production to third parties overseas,” says Ulama. As US computer manufacturers continue to offshore production and encounter heavy competition from international manufacturers, the industry will confront similar circumstances. Also, as manufacturing technology continues to improve, manufacturers will likely phase out existing plants by replacing them with newer facilities.
For more information, visit IBISWorld’s Semiconductor and Circuit Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Semiconductor and Circuit Manufacturing industry includes companies that manufacture semiconductors and related devices and parts. Products in this industry include integrated circuits, memory chips, microprocessors, diodes, transistors and other optoelectronic devices.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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