The Rise of Big 4 in the Semiconductor Industry

Introduction:

Since the time semiconductors were invented they have changed the course of technological advancement in the world. For years after its invention the semiconductor market trend was in favor of the US. Even today the USA contributes to 47% of total revenue in the semiconductor industry. But in the last 20 years, the semiconductor industry transformed into a battlefield among the US and the 4 rising countries of East Asia. These countries were South Korea, Japan, China, and Taiwan. As these countries used modern methods to manufacture semiconductors, the cost per chip reduced and the American companies bleeded. It is to be understood that the US still holds the major share in both revenue and market size in the semiconductor industry. But it is facing tough competition from these 4 countries. How these 4 countries have changed the dynamics of the semiconductor industry is discussed below.

South Korea: The Boss Among the Four

South Korea is the leading country among the four asian countries. According to a semiconductor market trend report, South Korea contributes to 19% of global semiconductor industry revenue. Some of the major semiconductor companies in South Korea are Samsung and SK Hynix. Samsung is the most important semiconductor company in South Korea, which conducts IC design, smart phones and wafer manufacturing. In 2019, the total revenue of Samsung was $52.2 Billion. SK Hynix has led the world in DRAM and NAND Flash market share for many years. In 2019, the total revenue of SK Hynix was $22.47 Billion. Fabless/IDM and Foundry are the strength and specialized fields for South Korea.

Taiwan: The Manufacturing Powerhouse of the Semiconductor Industry

Taiwan is the manufacturing hub of semiconductors. TSMC is the biggest Semiconductor contract company in the world. Taiwan contributes to 6% of global semiconductor industry revenue. Taiwan is also benefiting from the impact of the US-China trade war, in which a large amount of talent and many enterprises are rapidly flowing back to Taiwan. TSMC, UMC, Media Tek. Inc, Realtek, CHIMEI INNOLUX, Macronix are some of the leading semiconductor companies in Taiwan. Taiwan specializes in Wafer foundry, IC Design, PC, Telecom, Optoelectronics, Precision Machinery & Materials etc.

Japan: Steady and Stable

Japan is the poster boy for technology savvy countries. The semiconductor industry in Japan is steady and stable. Japan contributes to 5% of global semiconductor industry revenue. Sony Semiconductor, Sony LSI Design, Hitachi ULSI Systems, Toshiba Corporation, Rohm Fukuoka, Mitsui High-tec are some of the leading semiconductor companies in Japan.

China: The Dragon is Awakening

China is one of the most rapidly advancing countries in the semiconductor industry. China contributes to only 5% of global semiconductor industry revenue, but accounts for 30% global semiconductor sales. As China is planning on self-efficiency in the semiconductor industry, it can pose serious threats to US dominance in the semiconductor industry. China is quite strong in Outsourced Semiconductor Assembly & Test (OSAT), and has a large share of the global market. The rapid growth in China has stressed the American companies and it is expected that in the next 10-20 years China will become the powerhouse of the semiconductor industry.

Summary:

For years, American companies have dominated the semiconductor industry. But now the Big 4 is posing some serious threats to the US. Only time will reveal who will have the final edge among them.