One of the essential components of electronic devices is a semiconductor, also called an integrated circuit (IC). Semiconductors are the motor of innovation – the microchips enable advances in artificial intelligence, transportation, healthcare, the military system, communications, etc. To put it simply, semiconductors are the brains of modern electronics. What are the world’s top semiconductor producers?
What is a semiconductor?
Semiconductors (ICs, microchips) are often made from pure silicon or germanium or compounds such as gallium arsenide. Small amounts of impurities are added to these elements, which influence the material’s conductivity. Also, rare gases like neon are used in the manufacturing process, most of which are imported from Ukraine and Russia.
Microchips are essential for electronic devices: radios, TVs, computers, laptops, smartphones, vehicles, medical diagnostic equipment, and so on. Microchips are so crucial that some call them the “new oil” of the 21st century.
When it comes to semiconductor production, there are several main stages:
- design – the companies that design semiconductors are called “fabless” firms
- manufacturing – the companies that produce semiconductors are referred to as “foundries”
- assembling – the companies that offer third-party IC-packaging and test services are called “OSAT.”
Fabless and foundries together are called Integrated Device Manufacturers (IDMs).
Developments in semiconductor technology made electronic devices faster, smaller, and more reliable.
Semiconductor market
Global semiconductor sales reached $556 billion in 2021, an increase of 26.2% from 2020. Semiconductors market growth in different areas is as follows:
- America’s region – 27.4% growth
- Europe – 27.3% growth
- APAC – 26.5% growth
- Japan – 19.8% (below-average growth).
The forecast says that the global semiconductor industry will become a trillion-dollar industry by 2030.
World’s top semiconductor producers
Although trade in integrated circuits represents 4% of total world trade, they are the world’s most traded product. The biggest exporters of semiconductors (HS code 8542) are Taiwan (Chinese Taipei), China, South Korea, Malaysia, Singapore, and the US. The biggest importers of integrated circuits are Hong Kong, China, Singapore, Taiwan, and South Korea.
5. The United States
Even though microchips were invented in the US, the semiconductor manufacturing industry is not its priority. The US share of global semiconductor manufacturing capacity has declined from 37% (in 1990) to 12% since not enough investments were made. Due to that, ¾ of the world’s chip manufacturing capacity is now concentrated in Asia. Still, the US is the leader in the semiconductor industry’s annual global market share. Moreover, it has the highest semiconductor R&D expenditures as a percentage of sales by country (18,6% compared with 12,9% in Japan).
4. China
China is a major manufacturing center for key electronic components. In five years, the semiconductor device sales in China jumped from 3.8% of global chip sales to 9%. As for manufacturing, in 2000, China produced 1% of ICs, and it is forecasted that in 2030 China will make nearly ¼ of the semiconductors in the world.
In recent years, all four subsegments of the Chinese semiconductor supply chain recorded rapid increases in revenue, and the growth trend will probably continue. The forecast says that China’s semiconductor industry will outrun the ones in Japan, South Korea, and Taiwan in the following years.
3. Japan
In semiconductor manufacturing, Japan is ranked third behind Taiwan and South Korea. Globally, it accounts for more than 50% of the semiconductor material production market and around 30% of the equipment-production market. Even though Japan’s share of global chip production has declined, it is still a key player in the supply chain. Part of the Japanese government’s strategy is to revitalize Japan’s semiconductor industry to enhance the nation’s economic security.
2. South Korea
Semiconductors are South Korea’s leading export product. The country is home to more than 20,000 semiconductor-related companies. In recent years, Samsung has been the biggest semiconductor producer by revenue. It accounts for 17% of the global foundry market. In the following years, South Korea will focus on expanding foundry facilities, especially in the “K-semiconductor belt” south of Seoul.
1. Taiwan – world’s top semiconductor manufacturing country
Taiwanese companies account for 50% of the semiconductor world market. The biggest Taiwanese semiconductor company is TSMC (foundry). TSMC makes microchips for Intel, Apple, AMD, Nvidia, and Qualcomm. Other major Taiwanese semiconductor companies are:
- UMC, the largest after TSMC contract chipmaker
- SMIC
- PSMC
- VIS.
The geopolitical strength of the semiconductor industry is often referred to as Taiwan’s “Silicon Shield.”
World’s top semiconductor producers – in a nutshell
Semiconductors surround us all the time, and the recent microchip shortage reminded us how essential they are. Apart from the US Asian countries, such as Taiwan, China, South Korea, and Japan, are the biggest semiconductor producers in the world. Taiwan, China, and South Korea foundry companies account for 87% of the global market.
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