Chip sales rose 6.5% globally in 2020 after year-end rush

Global semiconductor sales rose 6.5% overall in 2020, as a recovery during the last three months of the year helped offset a sharp dropoff in March and April, when pandemic stay-home orders rolled out around the world.

Global sales were $439 billion in 2020, according to data from the Semiconductor Industry Association (SIA), a trade group that represents most U.S. chipmakers along with many international firms. The group said sales from U.S. chipmakers were about $208 billion, or about 47% of the total.

Chip sales into the United States were $94.15 billion, up 19.8% from the previous year.

Falan Yinug, SIA’s director of industry statistics and economic policy, said much of the rise in U.S. purchasing was driven by high-end memory chips used in applications such as data centers.

American tech companies such as Amazon.com Inc, Microsoft Corp and Alphabet Inc’s Google all saw dramatic rises in the use of cloud computing over the course of 2020 as businesses adapted to working from home.

While U.S.-based companies represented nearly half of semiconductor sales, they represented only about 12% of chip manufacturing capacity in 2020. That is down from 37% in 1990, as most U.S. companies now source their chips from factories in Asia.

John Neuffer, president and chief executive of the industry group, said legislation passed last year to provide incentives to chip factories in the United States could help change that figure this year. The law could provide funding to U.S. companies such as Intel Corp or GlobalFoundries, as well as foreign firms such as Samsung Electronics Co Ltd or Taiwan Semiconductor Manufacturing Co Ltd.

“Over the next 10 years, semiconductor manufacturing is going to grow 56%,” Neuffer said. “We want to make sure we’re getting a bigger piece of the manufacturing pie.”