The United States runs the risk of lose a large share of the chip design market without government support for the sector. The warning was issued by a report released on Wednesday by the Semiconductor Industry Association (SIA) and Boston Consulting Group (BCG).
Despite having dominant companies such as Nvidia, Intel and Qualcomm, the US share of chip design revenue has fallen sharply in recent years, dropping to 46% in 2021 from more than 50% in 2015.
The report says that without proper support from the US government, the scenario will be even worse, as the country may have around 36% market share by the end of this decade.
Without federal investment, the US could end up ceding industry leadership to other countries like China and South Korea.
The text also points out that the United States has already lost leadership in chip manufacturing, since many manufacturers such as Nvidia and Qualcomm only design their processors in the US and send them to third parties to assemble them.
And it is precisely in this sector that TSMC maintains its absolute leadership, since the Taiwanese company is one of the few that dominates the 3nm process.
The report also says that government support is helping companies in countries such as China and South Korea gain market share in chip design. The Chinese case is what draws the most attention, as the country is working to get rid of dependence on the US.
Finally, the document reports that the Biden government’s investment in chip design and research will be necessary to maintain US leadership in the segment. However, SIA warns:
The recent US chip law provides for investment of US$ 39 billion in subsidies for chip production and an additional US$ 13 billion for research and development. However, nothing has been set in stone for the chip design.
