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On March 20, the U.S. Department of Commerce announced that the U.S. government and Intel have reached a non-binding preliminary memorandum of term (PMT) to provide up to $8.5 billion in direct funding and up to $11 billion in loans under the U.S. CHIPS and Science Act to support the latter's semiconductor projects in multiple states in the United States.
According to the statement, Intel will invest more than $100 billion in the United States over the next five years, including building large factories in Arizona and Ohio to produce cutting-edge semiconductors, as well as equipment research and development and advanced packaging projects in small factories in Oregon and New Mexico. This will directly create more than 10,000 manufacturing jobs and nearly 20,000 construction jobs.
Previously, according to people familiar with the matter, the Pentagon canceled plans to provide up to $2.5 billion in chip subsidies to Intel Corporation.
In August 2022, U.S. President Joe Biden signed the CHIPS Act into law, which will provide $52.7 billion to subsidize the U.S. chip industry. It is understood that the funds will be used to ensure the manufacturing of key components supplied in the United States, and aims to incentivize the construction of chip factories in the United States and attract the return of key manufacturing industries.
The U.S. semiconductor industry has long been one of the most competitive and innovative industries in the world. In recent years, the U.S. government has paid more and more attention to the semiconductor industry, and has promoted the development and growth of its semiconductor manufacturing industry through various policies and financial support.
-- The United States is the most important exporter of semiconductors
In 2021, U.S. semiconductor companies had a share of more than 35% in all major markets around the world, including 50% in China and Europe, and 38.7% in the lowest Americas.
-- The U.S. semiconductor industry plays a large role in leveraging employment
In terms of employment and productivity, the U.S. semiconductor industry directly employs 277,000 people, creating more than 1.6 million jobs overall, and labor productivity has more than doubled in 20 years.
-- Distribution of semiconductor production capacity in the United States
By 2021, about 80% of the semiconductor wafer manufacturing capacity in the U.S. will come from U.S.-based companies. Asia-Pacific-based semiconductor companies account for the majority of the U.S. capacity balance, accounting for nearly 10 percent.
The report released by the research institute Market.us predicts that the global semiconductor market will grow significantly. The market size is expected to reach $673.1 billion by 2024, while it is expected to grow at a CAGR of 8.8% between 2023 and 2032. The semiconductor market is expected to grow to $1.3 trillion by 2032. According to the agency, the significant growth trend in the semiconductor market is partly due to increased demand, technological advancements, and the widespread adoption of IoT devices. In addition, the need for remote work and learning during the pandemic has also driven further expansion of the semiconductor market.
According to the research report released by Zheshang Securities, since November 2023, global and Chinese semiconductor sales have achieved positive growth for three consecutive months year-on-year, and the growth rate continues to expand, indicating that the industry's prosperity is rising. By January 2024, global semiconductor sales will reach $47.6 billion, a year-on-year increase of 15%, and the growth rate has expanded by 3.6 percentage points. From the perspective of downstream demand, global smartphone shipments in the fourth quarter of 2023 turned positive year-on-year, and the sales of new energy vehicles continued to grow highly. From the perspective of downstream prices, the global storage market will show high growth in the fourth quarter of 2023, and DRAM prices will also recover significantly. The recovery in end-user demand and rising product prices show that the semiconductor cycle is now in a positive position.
Prospective Economist APP Information Group
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