+3.3% in 2022. -10.3% in 2023. +11.8% in 2024 to $576bn. The semiconductor chip market is yo-yoing, according to World Semiconductor Trade Statistics. “This expansion is expected to be driven primarily by the memory segment, which is forecast to rise to $120bn in 2024, marking an increase of more than 40% on the previous year. Almost all other key categories, including discrete, sensor, analogue, logic and micro, are expected to post single-digit growth.”
Because behind the word “chip” lies a diversity of technologies.
“There are more than 50 points in the value chain where one region holds more than 65% of the global market share,” adds the Boston Consulting Group for the Semiconductor Industry Association. “These are potential single points of failure that could be disrupted by natural disasters, infrastructure shutdowns or international conflicts, and could lead to serious disruptions in the supply of critical chips. Around 75% of the world’s semiconductor manufacturing capacity, for example, is concentrated in China and East Asia, a region highly exposed to seismic activity and geopolitical tensions. In addition, 100% of the world’s most advanced semiconductor manufacturing capacity (less than 10 nanometres) is currently located in Taiwan (92%) and South Korea (8%). These advanced chips are essential to the US economy, national security and critical infrastructure.”
And the different ecosystems are going to have to work together, says the Boston Consulting Group. “A hypothetical alternative with fully self-sufficient local supply chains in each region would require at least $1trn in additional upfront investment and lead to a 35-65% global increase in semiconductor prices, ultimately driving up the cost of electronic devices for consumers.”
The key is in research and development around miniaturisation. One dollar invested generates $24 to $30 in design-related sales. “Public investment in design and R&D of around $20bn-30bn up to 2030 (including a $15bn-20bn tax incentive for design) would generate additional design-related sales of around $450bn over ten years, while supporting training. And employment for around 23,000 design jobs and 130,000 indirect and induced jobs, and strengthen the US leadership position in semiconductor design.”
It is precisely through research that .
A company to watch
Lattice Semiconductor Corporation. Honoured with several awards, the American company ended 2022 with a new record of $660m in revenues (+24%) and is aiming for around $750m this year. It already spends more than 20% of its resources on research and development.
The company, of which Jim Anderson is president and CEO, generates almost half of its sales from the automotive sector. It already has a bunch of champions in its client portfolio: Amazon, Bosch, Canon, Cisco, Dell, Ericsson, Ford, Fujitsu, Google, HP, Hitachi, Lenovo, Samsung, Lockheed Martin, Siemens, Sony, Nokia, Panasonic, Raytheon and ZTE (to name but a few). At around $85 a share in mid-July, it has gained 70% in a year, but it’s already a little late to get in on the action...
This story was first published in French on . It has been translated and edited for Delano. This article is not intended as investment advice. Be sure to carefully investigate any company mentioned in the press before taking an investment decision.