The U.S. semiconductor market is expected to grow at a CAGR of 7.04% between 2024 and 2031, expanding from USD 294.32 billion in 2023 to USD 507.21 billion in 2031. This surge is driven by the increasing demand for semiconductors, fueled by advancements in AI, IoT, and 5G technologies. Additionally, the U.S. government is prioritizing semiconductor advancements and sales growth, strengthening the market’s future prospects. According to the Semiconductor Industry Association (SIA), global semiconductor sales in April 2024 reached USD 46.4 billion, marking a 15.8% increase from April 2023 and a 1.1% rise from March 2024. SIA also reports that the U.S. semiconductor sector accounts for 99% of the domestic market and approximately two-thirds of non-U.S. chip sales.
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Government Investments in Semiconductor Production Facilities
The U.S. government is making significant investments in semiconductor manufacturing facilities, ensuring the production of essential components for devices like smartphones and medical equipment.
For example, in April 2024, the CHIPS and Science Act allocated up to USD 6.4 billion to Samsung Electronics, enabling the company to expand its semiconductor operations in Taylor, Texas. This funding will support the construction of two new logic fabs, an R&D center, and an advanced packaging facility, along with the expansion of Samsung’s existing Austin factory. The initiative is expected to create over 21,500 jobs, solidifying the region as a key semiconductor hub. Additionally, this investment will help Samsung meet the growing demand for advanced processors, particularly in areas like artificial intelligence, ensuring supply chain stability in the U.S.
Rising Demand for Analog ICs Driving Market Expansion
The increasing use of analog integrated circuits (ICs) is fueling growth in the U.S. semiconductor market, primarily due to the rising demand for consumer electronics such as smartphones and IoT devices. Analog ICs are crucial for signal processing and audio amplification, and their use in automotive electronics is further boosting the market.
In October 2023, the Center for Design of Analog-Digital ICs (CDADIC) in Washington, D.C., announced research projects covering RF IC and analog/mixed-signal design. Some notable initiatives include:
- Micro-power CMOS interface circuits
- High-performance CMOS mixed-signal circuits
- Interferer-tolerant wireless transceivers
- Low-power clock generation for 5G and beyond
These projects involve collaboration between researchers, students, and industry professionals to advance analog/RF IC technology in the U.S.
Technological Advancements Accelerating Market Growth
Rapid technological progress is propelling the U.S. semiconductor market, with advanced semiconductor packaging emerging as a key trend.
For instance, in July 2024, the Biden-Harris administration, through the CHIPS for America initiative, announced an investment of up to USD 1.6 billion to enhance advanced semiconductor packaging capabilities. This funding will support R&D efforts in new package structures, materials, and manufacturing processes, aiming to push the boundaries of semiconductor packaging technologies. By fostering a strong domestic semiconductor ecosystem, this investment will position the United States as a leader in high-performance computing and artificial intelligence. Additionally, these funds will complement private sector investments from industries and academic institutions.
Government Policies Driving Market Expansion
The U.S. government is implementing strict policies to boost domestic semiconductor production, fostering market growth.
In March 2024, under the International Technology Security & Innovation (ITSI) Fund, the U.S. Department of State partnered with the Government of Mexico to strengthen and diversify the global semiconductor supply chain. The collaboration focuses on:
- Coordinating government incentive programs
- Developing international semiconductor supply chains
- Enhancing information sharing and security protocols
This initiative aims to reduce reliance on foreign semiconductor suppliers while building a more resilient global semiconductor network.
Western United States Leading Market Growth
The western U.S., particularly Silicon Valley, remains the dominant region in the semiconductor industry due to its strong concentration of major corporations, research hubs, and skilled workforce. Government initiatives like the CHIPS & Science Act are further strengthening local manufacturing capabilities.
Although the U.S. currently produces only 12% of global semiconductor output, policies such as the CHIPS Act are expected to boost domestic chip production and enhance the country’s global competitiveness.
Future Market Outlook (2024-2031)
- Growing demand for discrete power devices is driving their adoption in power electronics applications, creating new growth opportunities in the U.S. market.
- Analog IC usage is rising across industries such as automotive, industrial, and consumer electronics, further fueling market expansion.
- Increased investments in R&D are fostering technological innovations, paving the way for next-generation semiconductor advancements in the U.S.
Report Scope
The report “United States Semiconductor Market Assessment, Opportunities, and Forecast (2017-2031)” by Markets and Data provides a detailed analysis of the current state, growth trends, and challenges in the U.S. semiconductor industry. It includes:
- Market size projections
- Segment-wise growth trends
- Key opportunities and challenges
- Competitive landscape analysis
Contact
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