North American semiconductor equipment sales reached a record-setting $3 billion in January  

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Semiconductor industry growth in 2020 report.

SEMI reported North American semiconductor manufacturing equipment companies made a record-setting $3 billion in January, up 29.9 percent year-over-year.

The industry advocacy group asserts the sector’s robust growth represents the “acceleration of digital transformation,” a societal development that started following the outbreak of the coronavirus pandemic.

Given recent developments, such as the global chip shortage, the regional segment will likely experience even greater growth soon.

Why Electronic Component Manufacturing Equipment Billings Hit $3 Billion in January

North American semiconductor manufacturing equipment billings reach new heights in January for three reasons.

First, the U.S. is home to industry-leading providers like Applied Materials, Lam Research, Advantest, and Teradyne. Accordingly, manufacturers worldwide make large purchases from the region’s equipment providers whenever they expand their production capacity.

Second, the global semiconductor industry is experiencing a significant growth cycle.

Following the coronavirus outbreak, businesses and individuals embraced computing hardware and online services to accommodate living in the new normal. Since cutting-edge electronic parts power those technologies, vendors increased their equipment purchases last year to meet demand.

In fact, North American chip-making machinery revenue grew by over 20 percent every month from July 2020 to November 2020.

Third, component manufacturers are working to rapidly build out production capacity amid a recent global semiconductor shortage. The worldwide shortfall began last year as demand for automotive electronic parts spiked, but vendors lacked adequate supplies to satisfy the end-market interest. As foundry service providers adjusted to resolve the bottleneck, the chip scarcity spilled into multiple industries.

The crisis prompted semiconductor producers worldwide to invest in their production capacity as their fabrication partners had been overwhelmed by demand.

The perfect storm of COVID-19 and the chip shortage drove the North American component manufacturing equipment market’s January growth spike.

The Future of the North American Semiconductor Equipment Sector

Last August, Global Market Insights rightly predicted the post-pandemic digital transformation trend would drive demand for chip-making machines. However, its forecast might be too cautious given the component shortage’s economic impact and political fallout.

Analysts expect the semiconductor shortfall will cost the global automotive sector $61 billion this year. Market intelligence specialists also expect the event will have an even greater negative financial impact on the consumer electronics segment. Unfortunately, there is no short-term solution to the problem because it is impossible to establish new state-of-the-art foundries quickly.

Leaders in the United States and the European Union want to prevent future crises caused by that issue through infrastructural development.

The Biden administration will conduct a 100-day review of critical U.S. supply chains, including its semiconductor ecosystem. The White House argued the process should include a $37 billion capital infusion into its domestic component sector in the short-term.

Similarly, a consortium of EU member states resolved to commit $145 billion to enhance its local chip industry. The group hopes to begin producing leading-edge processors within the region by 2025.

Those government initiatives will bring a staggering amount of capital to the global component-making sector. Both projects call for establishing new, large foundry complexes, which will require the purchase of many fabrication and testing machines. That means the North American semiconductor manufacturing equipment sector could be worth a lot more than $80 billion by 2026.

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