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1、Series TitleCover Title SubtitleMonth YearBy Author Name,Author Name,and Author Name Cover-Authors styleThe Growing Challenge of Semiconductor Design LeadershipNovember 2022By Ramiro Palma,Raj Varadarajan,Jimmy Goodrich,Thomas Lopez,and Aniket PatilBoston Consulting Group partners with leaders in bu

2、siness and society to tackle their most important challenges and capture their greatest opportunities.BCG was the pioneer in business strategy when it was founded in 1963.Today,we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organiza

3、tions to grow,build sustainable competitive advantage,and drive positive societal impact.Our diverse,global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change.BCG delivers solutions through leading-edge management consulting,t

4、echnology and design,and corporate and digital ventures.We work in a uniquely collaborative model across the firm and throughout all levels of the client organization,fueled by the goal of helping our clients thrive and enabling them to make the world a better place.The Semiconductor Industry Associ

5、ation(SIA)is the voice of the semiconductor industry,one of Americas top export industries and a key driver of Americas economic strength,national security,and global competitiveness.Semiconductorsthe tiny chips that enable modern technologiespower incredible products and services that have transfor

6、med our lives and our economy.The semiconductor industry directly employs over a quarter of a million workers in the United States,and US semiconductor company sales totaled$258 billion in 2021.SIA represents 99%of the U.S.semiconductor industry by revenue and nearly two-thirds of non-US chip firms.

7、Through this coalition,SIA seeks to strengthen leadership of semiconductor manufacturing,design,and research by working with Congress,the Administration,and key industry stakeholders around the world to encourage policies that fuel innovation,propel business,and drive international competition.Learn

8、 more at www.semiconductors.org.BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 1Semiconductors are ubiquitous,powering technologies that range from cell phones to the Mars rovers Curiosity and Perseverance,and economically important.In 2021,worldwide semiconductor sales totaled$556

9、 billion.Semiconductor designwhich includes design of both physical integrated circuits and associated softwareaccounts for roughly half of all industry R&D investment and value add.1Executive Summary1.Industry value add is the amount by which the value of an article increases at each stage of its p

10、roduction,exclusive of initial costs.2.Design revenue calculations are based on fabless companies and estimated share of integrated device manufacturer(IDM)revenues attributable to design.US companies have played a leading role in semiconductor design,and as a result the US has benefited from a virt

11、uous cycle of innovation,enhancing its ability to shape technical standards,strengthen national security,offer high-quality employment,and generate competitive advantage for original equipment manufac turers(OEMs)in adjacent industries.(See Exhibit 1.)In recent years,however,the USs share of design-

12、related revenues has begun to show signs of a decline,dropping from over 50%in 2015 to 46%in 2020.2 Other regions,especially South Korea and China,are seeing local growth in their design capabilities.Our analysis shows that at the current trajectory(that is,if planners take no action),the US share c

13、ould fall to 36%by the end of this decade as other regions capture a larger share of future growth.Should the US aim to defend its leadership position in de sign and reap the associated downstream benefits of design leadership,it would need to address three challenges.Challenge 1:Design and R&D inve

14、stment needs are rising.As chips have grown more complex,development costs have risen,especially for chips made on leading-edge manufacturing nodes.Today,the US private sector invests more in design R&D than any other regions private sector does,but governments around the world offer significant inc

15、entives to attract advanced design,and the US risks falling behind.In addition,the relative level of public sup-port for R&D in the US lags that of other regions.The over-all share of semiconductor-specific design and R&D funded by public investment is 13%in the US,compared to an aver-age of 30%acro

16、ss mainland China,Europe,Taiwan,Japan,and South Korea.Bringing US public investment in design and R&D into line with international peersincluding,for example,direct incentives such as tax credits for advanced design and R&D performed in the USwill help ensure a level playing field for design in the

17、US relative to other regions.Challenge 2:The supply of design talent is dwindling.Although most of the worlds semiconductor design engi-neers today are based in the US,the US semiconductor design industry faces a shortage of skilled workers and is on track to see this shortage increase to 23,000 des

18、igners by 2030,given trends in the number of science,technology,engineering,and mathematics(STEM)graduates and the number of experienced engineers leaving the industry.Public and private sectors must work together to encour-age more US workers to enter the field of design,as well as to encourage exp

19、erienced designers not to leave the field or the country.Further,the private sector must continue to enhance the productivity of its workforce by developing and deploying new tools and prioritizing the highest value-add R&D and design.Challenge 3:Open access to global markets is under pressure.Sales

20、 are the ultimate source of funding for investment in R&D,but tariffs,export restrictions,and other factors threaten US semiconductor players access to global markets,implicitly putting R&D reinvestment at risk.Secular trends may reverse some elements of globalization,but ensuring that markets remai

21、n as open as possible will benefit the US,which gains significantly from free trade and has the most to lose from proliferating restrictions.2 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIP3.These calculations assume that each public dollar invested in design and R&D induces an additional$

22、2 to$3 of private-sector R&D investment and that each incremental dollar of R&D yields$6 of incremental sales.The US private sector is likely to invest$400 billion to$500 billion over the next ten years in design-related activities,including R&D and workforce development.But to maintain leadership o

23、ver the coming decade,the US needs comple-mentary public-sector investments aimed at addressing the key challenges laid out above to strengthen both the domes-tic semiconductor industry and the country as a whole.Further,the leverage provided by public-sector investments would be substantial.Our ana

24、lysis suggests that each public dollar invested in design and R&D would induce additional private-sector investment in design and R&D,ultimately yielding$18 to$24 of design-related sales.3As a result,public investment in design and R&D of approx-imately$20 billion to$30 billion through 2030(includin

25、g a$15 billion to$20 billion design tax incentive)would yield incremental design-related sales of about$450 billion over ten years,while also supporting training and employment for about 23,000 design jobs and 130,000 indirect and induced jobs,and fortifying the US leadership position in semiconduct

26、or design.StrongersecurityHigh-qualityemploymentBenefitsfor OEMsAbility to shapestandardsVirtuous cycleof innovationLeadership attracts global talent and contributes to a cycle of innovation and reinvestmentFirst movers have an advantage in setting and leveraging the benefits of global technical sta

27、ndardsNational security benefits from improved defense systems at lower risk of tampering and disruptionThe average annual income of workers employed in semiconductor design was$170,000,compared to the US median of$56,000Close collaboration between OEMs and local design teams creates competitive adv

28、antageSource:BCG analysis.Exhibit 1-Market Leadership in Semiconductor Design Confers Multiple AdvantagesBOSTON CONSULTING GROUP 3BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 3The Growing Challenge of Semiconductor Design LeadershipSemiconductors are critical to the functioning o

29、f the modern world driving economic competitiveness,national security,and technologies ranging from modern defense capabilities to autonomous vehicles.The semiconductor industry is of high strategic importance and semiconductor manufacturing is increasingly the focus of industrial policies across ma

30、jor economies.Before semiconductors or chips can be manufactured,however,they must be designed,and this report focuses on the design of semiconductors.We start by laying out what semiconductor design is and why it is important,and we discuss the USs history in this domain as well as the benefits tha

31、t design leadership has conferred.Despite its high value,leadership in design is not inevitable,and today the US faces three key challenges to maintaining its position as a market leader:increasing difficulty and R&D intensity associated with semiconductor design;a shortage of domestic talent;and th

32、reats to global market access that enable ongoing reinvestment in design.We estimate the impact of the talent shortage on US design leadership and the possible benefits and returns of potential policies the US could pursue if it chose to sustain leadership in semiconductor design.4 THE GROWING CHALL

33、ENGE OF SEMICONDUCTOR DESIGN LEADERSHIPDesign Is a Critical Part of the Semiconductor Value Chain In building a house,architects and building engineers work together to design the high-level layout of,for example,a colonial or post-modern home.These professionals deter-mine where to position rooms a

34、nd windows to create a space that meets their clients needs.Architects and build-ing engineers must consider a range of tradeoffsfor ex-ample,between living space and storage spaceand lay out the detailed framing,plumbing,electrical,and other consid-erations that make a home livable.All of this prep

35、aratory work must occur before actual construction can begin.Similarly,before semiconductors can be manufactured,they must be designed.And just as tradeoffs are necessary in home designfor example,between openness and privacychip design requires tradeoffs between such desirable objectives as perform

36、ance and power efficiency,the processing of general instructions and the processing of highly specialized instructions,and inputs of digital data and inputs of real-world analog data.And just as expertise in designing single-family homes does not qualify an architect to design a skyscraper,the skill

37、s needed to design chips for different applications are in many cases not fungible.(See“Key Semiconductor Design Technologies,”in the Appendix.)Further,chip design can be a massive undertaking that requires large teamssometimes including hundreds of highly skilled design engineers,each with differen

38、t specialtiesto col-laborate for years before a design is complete and ready for production.Historically,the US has led the world in semiconductor design.(See Exhibit 2.)Well-designed chips enable automobiles to operate safely,advanced medical equipment to preserve or save lives,and military radar s

39、ystems to detect dangers.Semiconductor design has helped make virtually all sectors of the econo-my,from farming to manufacturing,more effective and efficient.Semiconductor design has also been pivotal in new innovations,such as artificial intelligence(AI),that are transforming entire areas of techn

40、ology and the economy.When semiconductor design improves,all applications that use semiconductors benefit as well.Conversely,when semiconductor design stagnates,all related applications suffer too.In addition,design innovation is fundamental to future semiconductor improvements.As physical scaling d

41、ifficulties continue to increase,design-related innovations such as new architectures and heterogeneous integration will be increasingly important.Heterogeneous integration will improve performance by allowing designers to choose among the best possible manufacturing technologies for different eleme

42、nts of each chip(for example,power man-agement on silicon carbide,analog functions on 28nm,and high-performance logic on leading-edge node sizes)and deliver levels of overall performance that were previously impossible.Design is the key activity that differentiates one semi-conductor from another an

43、d guides how raw silicon wafers become state-of-the-art chips,so its no surprise that de-sign requires significant R&D investment.(See“Summary of the Semiconductor Value Chain”in the Appendix.)In fact,the R&D intensity of design is about 20%,and the R&D intensity of EDA and core IP is greater than 3

44、0%,compared to about 10%for wafer fabrication and equip-ment production.BOSTON CONSULTING GROUP 5BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 5Design Is Complex and Includes Multiple Different Types of Firms and ActivitiesSemiconductor design involves two types of activities:hard

45、 ware design and software development work.Hard-ware design is a multistep process encompassing product definition and specification,system design,integrated circuit design,and post-silicon validation.(See Exhibit 3.)Software development entails the creation of firmwarea type of lower-level software

46、 that bypasses(for example)the operating system of an end device,like a laptop,to provide instructions directly to a chip.As design grows more com-plex,it becomes an increasingly iterative process especially for leading playersthat occurs in parallel in order to surface issues earlier,optimize overa

47、ll system-level performance,and decrease time to market.Hardware designers use both new and established tech-niques in the design process.When driving innovations,designers generate new,specialized designs that enable specific applications to leverage the latest advances in design and related techno

48、logies.Designers will often use existing,reusable architectural building blocks(core IP)to simplify and accelerate creation of the overall design.In all cases,designers use highly advanced EDA software to automate the design process and ensure that chip designs can be manufactured on distinct and of

49、ten proprietary fabrication processes.Since a single chip can house billions of transistors,state-of-the-art EDA tools are indispensable for designing modern semiconductors.(See“Types of Semiconductor Design Activities”in the Appendix.)USTaiwanEuropeOtherMainland ChinaJapanSouth Korea211548247199245

50、9621391372081897264273746Memory(mostly IDM)Design subtotalDAO3Logic(mostly fabless)EDA and core IPDesignRevenue share of 2021 worldwide total,by region1(%)Industryvalue-add(%)R&D intensity2(revenue%)32889145010%of revenues34201417Sources:Capital IQ;SIA Factbook 2022;BCG analysis.Note:DAO=discrete,an

51、alog,and other;EDA=electronic design automation;IP=intellectual property.Because of rounding,not all bar segment totals add up to 100%.1The regional breakdown is based on company revenues and headquarters location.Design revenues are based on fabless companies and estimated share of IDM revenues att

52、ributable to design.2R&D intensity is measured as R&D divided by revenue.3Discrete,analog,optoelectronics,sensors,and others.Exhibit 2-The US Is the Longstanding Leader in Semiconductor Design6 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPMany kinds of companies engage in semiconductor de

53、sign,but they fall into four main categories:Fabless Companies.Responsible for roughly half of design-related value add,these companies focus on chip design.They partner with third-party merchant foundries to fabricate(that is,manufacture)their chips.Integrated Device Manufacturers(IDMs).Responsi-bl

54、e for about half of design-related value add,IDMs both design and manufacture chips.Within IDMs,design and manufacturing teams work together to bring new chips to market,usually at in-house fabrication facilities.Original Equipment Manufacturers(OEMs).OEMs,such as auto makers,also play a role in sem

55、iconductor design.They use semiconductors as inputs for other products.Some OEMs have begun to design their own chips,chiefly for their own products.For example,a cloud computing provider may design custom chips with spe-cific features that execute specific tasks very well.4 OEMs are a growing prese

56、nce in chip design and increasingly participate in the same product and talent markets that fabless companies and IDMs tap for their needs.EDA/IP Providers.EDA companies are trusted inter-mediaries between design companies and foundries,providing design tools,reference flows and some ser-vices.US le

57、adership in EDA tools confers significant ben-efits to US semiconductor design,as researchers have greater access to automation tools,to the engineers be-hind those tools and to support for experimentation with new design concepts.Third-party IP providers design and license IP building blocks(proces

58、sors,libraries,memo-ries,interfaces,sensors,and security).In addition to these players,design services companieswhich can be third-party providers or in-house teams at manufacturersperform a valuable function in developing and optimizing new designs.In particular,fabless compa-nies often work closel

59、y with a given foundrys design ser-vices team to ensure the compatibility of its designs with the foundrys fabrication processes.(See the sidebar “Spotlight on the Fabless-Foundry Ecosystem.”)Close collaboration is critical,as scaling up new processes in-volves inherent uncertainties in modeling and

60、 reaching target manufacturing yields.4.For example,Graviton,a family of chips designed by Amazon Web Services,includes features that allow chips to refresh their firmware to address issues without disturbing customers that are using the machine for other purposes.4321Product definition and specific

61、ationProduct management,system architecture,and customer define initial product requirementsArchitecture/system designSystem architects define block-level architecture for the design and may leverage previous IPPost-silicon validationValidation engineers validate physical device functionality across

62、 extreme working conditionsIntegrated circuit designMultidisciplinary effort:Logic:Initial analog and digital design Circuit:Digital synthesis and design for test Layout:Routing and mask generationVerificationVerification engineers verify design functionality and timing through simulationSources:Whi

63、te House 100 Day Supply Chain Review Report;BCG analysis.Exhibit 3-The Semiconductor Hardware Design Process Consists of Four Major StagesBOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 7In the mid-1980s,large and vertically integrated IDMs(integrated device manufacturers)performed

64、all semi-conductor design and fabrication.Seeking to offset the high capital expenditure required for fabrication equipment,IDMs began to make unused manufacturing capacity available to smaller companies to keep their fabs busy.While this enabled some companies with design expertise to produce chips

65、 without operating their own fabs,it re-mained a small part of IDMs businesses.IDMs often preferred to own the designs they fabricated,and they found it difficult to balance the needs of internal and exter-nal customers.In 1987,Dr.Morris Chang sensed an opportunity andin partnership with the Taiwane

66、se government and Philips Semiconductorlaunched Taiwan Semiconductor Manufac-turing Company(TSMC),the worlds first“pure-play”foundry(one involved exclusively in manufacturing and not in product design).TSMC assured its customers that as a dedicated foundry,it would not compete with them in design.TS

67、MC adopted a low-cost pricing strategy that depended on high-volume production for profitability.Although it sacrificed early profits,the companys market share for fabrication rapidly grew,allowing it to recoup its large capital expenditures and invest in next-generation technol-ogy nodes.TSMC was a

68、mong the companies that benefit-ed from the Taiwanese governments broad support for the semiconductor industry,through R&D assistance,work-force training,the establishment of high-tech corporate parks,and more.Although both the IDM model and the foundry model have their advantages,the emergence of p

69、ure-play foundries lowered barriers to entry for design companies and revolu-tionized the industry,leading to the emergence of fabless semiconductor design firms.Free of the large capital ex-penditures of manufacturing,fabless companies could focus their expertise and resources on innovations in de-

70、sign and partner with dedicated foundries for fabrication.Spotlight on the Fabless-Foundry Ecosystem8 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPBecause the technology of semiconductor design evolves continually,design leaders must leverage new and future technologies that are critical

71、for design innovation,including these:Hardware and Software Co-design.As systems be-come more complex,designers leverage practices such as design technology co-optimization(DTCO)and system technology co-optimization(STCO)to ensure that an improvement in one area does not create problems for overall

72、system-level performance.“Shift-left”design prin-ciples permit parallel software and hardware develop-ment by leveraging virtual prototyping and digital twins.AI-Based Design.Designers can more quickly and effectively meet power,performance,and area targets by leveraging AI-based tools.Reinforcement

73、 learning and other AI algorithms can automate less consequential de-sign tasks,freeing engineers to focus on more advanced tasks and decisions.2.5D/3D Designs,Chiplets,and Heterogeneous Integration.As the adoption of new process technolo-gies slows,design engineers have been moving to new design,in

74、tegration,and packaging technologies that help improve performance and reduce cost and power consumption.Heterogeneous integration permits in-creased use of highly specialized designs to further improve performance.Secure Design.Increased scrutiny on the security of semiconductor designs is promptin

75、g designers to place more emphasis on secure hardware modules and to develop enhanced tools,methods,and encryption.Designing security into semiconductors at the hardware level ensures that systems behave as expected,prevents faults,and enhances cybersecurity.To Date,the US has Enjoyed the Benefits o

76、f Leading the World in Semiconductor DesignAs of 2021,46%of semiconductor industry revenues were attributable to the design activities of US-headquartered companies,nearly 2.5 times as much as any other individ-ual region.US market leadership in design is most pro-nounced in logic,generating 64%of d

77、esign-related revenues in that sector,but it also extends to the design of discrete,analog,and other(DAO)devices,where US-headquartered companies generate 37%of design-related revenues.Only in memory,where South Korean firms generate 59%of all design-related revenues,does the US not have a market le

78、ading position,as detailed in Exhibit 2.Semiconductors help automobiles operate safely,advanced medical equipment save lives,and military radar systems detect dangers.10 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPMarket leadership in semiconductor design confers multiple advantages,incl

79、uding the following:A Virtuous Cycle of Innovation.Leadership in design supports a virtuous cycle of innovation.For example,design leadership has enabled firms in the US to attract and train a talented foreign-born workforce.The contribu-tions and innovations of this workforce generate profits that

80、companies can reinvest in R&D to drive continued expansion of the workforce and future innovations.Greater Ability to Shape Standards.In any technical domain,standards support interoperability and enable companies to more easily collaborate across the supply chain.Often,firms that lead in design are

81、 the first to develop products that require standards(as was the case with Wi-Fi,Bluetooth,and 5G wireless),and this enables them to play a leading role in reaching consensus on what standards are set and to rapidly develop expertise in optimal design for a given set of standards.Regions with many l

82、eading design firms will be at a relative ad-vantage in setting and leveraging the benefits of techni-cal standards.Stronger Security.Design leadership offers national security advantages in two dimensions.First,regions with design leadership have access to more advanced semiconductor chips that can

83、 give defense and weapons systems greater efficacy.Second,regions with design leadership may be at lower risk of malicious tampering and supply chain interdictionfor example,by protect-ing critical design information and enabling traceability and control of design IP.Expanded High-Quality Employment

84、.Design leader-ship supports high-quality employment directly via high wages and indirectly via high employment multiples.For example,in 2020,the average annual income for US workers employed in semiconductor design was about$170,000 compared to a US median of about$56,000.Advantage for OEMs in Adja

85、cent Industries.OEMs in technology-heavy industries rely extensively on semi-conductors in the systems they design.Because collabo-ration within a shared geography and cultural context is often easier,OEMs can create competitive advantage by working directly with market-leading chip designers and em

86、ploying practices such as co-design and system level optimization.(See the sidebar“OEMs That Benefited from Chip Design Leadership.”)BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 11Innovation leadership in semiconductor design yields innovations in multiple industries,thereby supp

87、orting broader economic growth and market leadership.Autonomous Cars.Semiconductor designers and auto-makers can create and co-optimize chips to more efficient-ly process data from the sensors on a car.Custom-designed chips can also include critical safety features such as re-dundant power systems t

88、o ensure that chips operate safely and reliably in the most challenging environments.Smartphones.By working closely with OEM device engi-neers,chip designers can optimize their designs to meet the evolving system needs of the latest smartphones.For example,custom-designed chips can improve on-device

89、 AI performance,image processing,and power efficiency.By tightly controlling design tradeoffs at the system level,designers can create hardware and software systems with more innovative features and superior overall performance.Cloud Computing.Designers create custom chips to meet specific cloud com

90、puting needs,from high-quality video streaming to efficient genomic analysis for COVID-19.Such chips help data centers optimize performance and lower power consumption.These benefits were clear in 2020 when fast cloud computing helped researchers and scien-tists rapidly sequence the genomes of COVID

91、-19 variants.5G Communications.Chip designers collaborate with other communications companies to optimize system performance.For example,chip designers work with net-work operators to tailor chips for network operators cell towers and for equipment manufacturers transceiver designs.By addressing the

92、se issues in tandem,mobile network operators can optimize the communications system more effectively and implement 5G more reliably.Medical Devices.Medical devices such as implantable pacemakers and neurostimulators can be lifesavers.By designing custom chips,medical device makers can ensure that de

93、vices that must function in challenging physical circumstancesinside a human body,for examplecan operate with ultralow power consumption,exceptionally high reliability,and maximum diagnostic usefulness.National Security.Missile systems,aircraft,unmanned aerial vehicles,and radar systems rely on semi

94、conductors.Chip design leadership enables the US defense industry to enhance existing and innovate new and superior defense systems that are critical to strengthening national security.OEMs That Benefited from Chip Design Leadership12 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIP123456789

95、10=New entrant in top 1019902000201020202030NECIntelIntelIntelLeadership to bedeterminedToshibaToshibaSamsungSamsungHitachiNECToshibaSK HynixIntelSamsungTexas InstrumentsMicronMotorolaTexas InstrumentsRenesas1QualcommFujitsuMotorolaSK HynixBroadcomMitsubishiSTMicroelectronicsSTMicroelectronicsNvidia

96、Texas InstrumentsHitachiMicronTexas InstrumentsPhilipsInfineonQualcommAppleMatsushitaPhilipsElpida2Infineon12345678910JapanEuropeUSTaiwanSouth KoreaDropped outof top 10:Fujitsu Mitsubishi Matsushita Motorola Hitachi Infineon Philips Renesas STMicroelectronics ElpidaTop 10 semiconductor companies by

97、revenueSources:IC Insights;BCG analysis.Note:Ranking based on global semiconductor sales excluding pure-play foundries.This exhibit is meant to illustrate the volatility of design market leadership and does not imply that only the top 10 companies by revenue are important to semiconductor design.1Po

98、st NEC/Renesas merger.2Combination of NEC,Hitachi,and Mitsubishi DRAM business.Exhibit 4-Design Leadership Is Volatile,with New Semiconductor Industry Leaders Emerging Each DecadeDesign Leadership Is Not Guaranteed Design leadership has shifted in the past and may shift again.In fact,since 1990,desi

99、gn leadership,as inferred from company revenues,has changed significantly in each decade.(See Exhibit 4.)US semiconductor companies,which today are leaders in design,arent sitting still.They have invested an estimated$40 billion in design-related R&D in 2021.Given the in-creased intensity of competi

100、tion,however,the US is on a trajectory to grow more slowly than other regions and potentially cede market share.The USs overall market share(measured by overall chip sales revenue)has fallen steadily,from about 50%in 2000 to 46%in 2020,and a pro-jected 36%by 2030.To understand the likely outlook for

101、 2030 market share,we modeled the flow of design engineers by geographic region,with the assumptions that revenue and market share are driven by R&D investment,and that R&D investment is driven by the availability of design engineers.We found that the US design workforce is likely growing at just ab

102、ove a replacement rate of less than 1%annually.In contrast,mainland Chinas design workforce is growing at 6%annu-ally,and the relative productivity of its engineers is improv-ing by 6%annually.The design engineering workforces in Europe,Japan,South Korea,and Taiwan are projected to grow at annual ra

103、tes of 1%to 3%.Overall,the forecasted rapid growth of mainland Chinas semiconductor industry could result in a 14-percentage-point gain in market share,while US market share may decline by 10 percentage points.The key factor contributing to this projected reduction in overall US market share is fast

104、er growth overseas,enabled by more favorable investment policies and workforce growth.This trend may restrict the relative ability of US-headquartered companies to reinvest,increasing the likeli-hood that leadership will shift to other regions.(See Exhibit 5 and“Semiconductor Design Workforce and Ma

105、rket Share Model”in the Appendix.)Three Key Challenges Facing the US Semiconductor Industry If the US semiconductor industry were to aim to defend its leadership position in design,three challenges would need to be addressed:Challenge 1:Design and R&D investment needs are rising.Each generation of s

106、emiconductors requires greater investment in design and R&D,including new EDA tools,IP,and process design kits,as well as semi-conductor designs.Several regions provide more public support for these efforts than the US does,leaving US-based chip design companies at a disadvantage and contributing to

107、 the erosion of US market leadership.BOSTON CONSULTING GROUP 13BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 13Market share by region of company headquarters(%)504848514641362822201110981112910109881014181919199162337701002080604016200012005720106Mainland China520152020202572030Ta

108、iwanSouth KoreaEuropeJapanUSStatus quo forecastDecline in US market share of 1 pp year over yearSources:WSTS data;SIA;BCG analysis.Note:Market share is based on revenues and the region in which headquarters is located for the company responsible for final sale of finished semiconductors;includes fab

109、less and IDM revenues;foundry and outsourced semiconductor assembly and test(OSAT)revenues are excluded to avoid double-counting.Market share projections are modeled on the basis of the flow of design engineers by geographic region,with the assumptions that revenue and market share are driven by R&D

110、 investment and that R&D investment is driven by the availability of design engineers.Because of rounding,not all bar segment totals add up to 100%.pp=percentage point.Exhibit 5-The Market Share of US Companies Has Fallen Since 2000 and Is Projected to Drop to 36%by 20305.Published by the Semiconduc

111、tor Research Corporation(SRC),the Decadal Plan for Semiconductors is a technical roadmap for the industry,outlining possible investments related to semiconductor design and R&D over the coming decade.6.Consider the example of extreme ultraviolet lithography(EUV),a technology used in chip manufacturi

112、ng.Initial research into this technology began in the 1990s.Public investment continued for decades until private industry took over development.Today,EUV is used in the manufacturing processes for many advanced chips.Challenge 2:The supply of design talent is dwin-dling.Semiconductor design require

113、s highly skilled workers with specialized expertise.US chip design com-panies compete for them with other technology compa-nies inside and outside the semiconductor industry in the US,and with chip design companies in other regions that are eager to win back their most talented nationals.Challenge 3

114、:Open access to global markets is under pressure.The free flow of semiconductors across global markets is under pressure from factors such as tariffs and export restrictions,threatening US companies abili-ty to achieve the scale and profits needed to fund invest-ment in ever-costlier next-generation

115、 design and R&D.The global semiconductor design industry has delivered important innovations for decades.Advances in semicon-ductor design will continue,whether or not the US takes action to preserve market leadership for US-headquartered firms.Addressing these challenges,which we detail in the next

116、 three sections of this report,will increase the likelihood that future innovations in semiconductor design are led by companies headquartered in the US.Challenge 1:Design and R&D Investment Needs Are RisingBetween 2006 and 2020,the cost of designing a new chip on the latest manufacturing node has i

117、ncreased by a factor of more than 18.(See Exhibit 6.)This increase has created a drag effect on new chip designs,creating opportunities for new entrants and existing nonleading players to catch up and expand their market share.The US private sector has responded by continually ex-panding its investm

118、ents in design and R&D,but correspond-ing US public sector support lags that of other regions in funding for basic research and direct tax incentives.5Funding for Basic ResearchOver the years,US government funding of high-risk basic research has been critical to advances that have profound-ly affect

119、ed daily life(for example,antibiotics,the internet,and satellite communications).Governments typically fund research that is too distant,too uncertain,or too difficult for a single firm to turn into a competitive advantage.6 While private industry has dramatically increased its fund-ing of R&D in re

120、cent decades,public funding in the US has remained flat at 0.03%of GDP,even as other regions have expanded their public investments.14 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPThe US,mainland China,Taiwan,South Korea,and the EU have all recently announced plans to fund the expansion o

121、f domestic semiconductor capabilitieswith a subset of these plans supporting design capabilities.(See Exhibit 7.)The plans encompass support for traditional basic research(such as precompetitive research within a university)and for commercial development(such as equity investments in semiconductor c

122、ompanies).Investments in both areas strengthen the pipelines of talent and innovation that are critical to leadership in design.Despite these increased investments,however,the overall share of semiconductor-specific design and R&D funding in the US by public investmentcomprising direct public R&D fu

123、nding,tax incentives,and other recent initiativesis 13%.In contrast,the share of semiconductor-specific design and R&D funded by public investment across Eu-rope,Japan,mainland China,South Korea,and Taiwan is 30%.(See Exhibit 8.)Tax IncentivesR&D tax incentives motivate private sector companies to i

124、ncrease their R&D expenditures.The US provides an average cumulative R&D tax incentive of 9.5%across fed eral,state,and local programs,which is below the medi-an of a comparison set of regions.7(See Exhibit 9.)In the US,these government incentives are usually avail-able to all industries,but other r

125、egions have adopted in-centives that are specific to the semiconductor industry,including incentives for design:South Korea recently established a“core strategy tech-nology”track that allows tax deductions of up to 50%for semiconductor R&D.Mainland China has exempted key design companies from corpor

126、ate income tax for five years after their first profitable year and imposes a reduced tax rate of 10%after that.The Indian government,as part of its Design Linked Incentive program,plans to scale up support for domes-tic semiconductor design by providing incentives of up to 50%of eligible R&D expend

127、itures.Since people perform most design activities,it is easier to move these activities across borders than,for example,to move a physical manufacturing facility.By providing more direct support for design-related R&D through a design incentive,the US could help stem its loss of design share by enc

128、ouraging both US and non-US companies to expand or build design centers within the US.2987nm(2018)65nm(2006)10nm(2017)28nm(2011)40nm(2008)22nm(2012)16nm(2014)5nm(2020)29385170106174542Over18XSoC advanced design cost($millions)1Technology nodes(year introduced)2Sources:IBS;AnySilicon;TSMC.1System-on-

129、a-chip(SoC)advanced design costs include intellectual property qualification,architecture,verification,physical,software,prototype,and validation activities.2Year in which a technology node began volume production.Exhibit 6-Design Costs Are Rising with Each New Technology Node7.The comparison set in

130、cludes Organization for Economic Cooperation and Development(OECD)regions with populations exceeding 4 million,as well as Brazil,Russia,India,and mainland China.BOSTON CONSULTING GROUP 15BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 15EU-funded European Processor Initiative to des

131、ign and build a family of high-performance,low-power processorsThe EUs European Chips Act seeks to reinforce Europes capacity to innovate in the design,manufacture,and packaging of advanced chipsGovernment approved a$600 million Design Linked Incentive program for semiconductors,providing preferenti

132、al tax treatment for design activitiesNational Integrated Circuit Investment Fund invests$3 billion in designRevamped stock market rules to establish STAR Market,on which fabless firms have raised over$50 billion through IPOsGovernment pledged$1.3 billion over ten years for AI and power chip designG

133、overnment will provide$300 million over seven years for semiconductor R&DMainland ChinaEuropeIndiaSouth KoreaTaiwanSources:Various press releases and government announcements;BCG analysis.Note:Regions are listed alphabetically.Plans listed are not exhaustive.Exhibit 7-Several Governments Have Funded

134、 Expansion of Local Semiconductor Design Capabilities$5 billion ofdesign R&Dat PPPPrivateDirect public R&D fundingTax incentivesRecent initiativesEstimated share of semiconductor-specific R&D funded by public investment(%)(includes estimates from recently announced initiatives)0204060US:13%Non-US1:3

135、0%+17 ppUSMainlandChina2Taiwan38316South Korea5Japan4Europe588713151755880127210126171216807544Sources:OECD national accounts data and ITIF;government websites;SIA;BCG analysis.Note:pp=percentage points;ppp=purchasing power parity.Because of rounding,not all circle percentages add up to 100%.1Includ

136、es mainland China,Europe,Taiwan,Japan,and South Korea.2Includes elimination of 25%corporate income tax for semiconductor design.3Includes$300 million over seven years for foreign companies to establish R&D centers.4Includes recent initiatives such as the Post 5G Fund and the Green Innovation Fund.5I

137、ncludes recent initiatives such as K-semiconductor belt strategy and AI R&D programs.Exhibit 8-The Share of Semiconductor-Specific Design and R&D Funded by Public Investment Varies by Region16 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPChallenge 2:The Supply of Design Talent Is Dwindlin

138、gIn 2021,US-headquartered companies employed approxi-mately 94,000 of the worlds estimated 187,000 semicon-ductor design engineers.Of that number,about 60%were physically located in the US,and about 40%were physical-ly located abroad.(See Exhibit 10.)Although US-headquartered companies will undoubte

139、dly continue to take advantage of the global talent pool,most companies core nexus for design innovation exists at domestic sites.Consequently,to maintain design leader-ship,US-headquartered companies must grow their US-based workforces.To better understand these dynamics,we took a bottom-up view of

140、 the design workforce,considering the workforces current size,the different skills needed,the current distri-bution of talent globally,inflows from universities,and outflows(in the form of retirement,industry changes,and departure of foreign-born talent from the US).Our analysis found that on averag

141、e,from 2021 to 2030,US universities will train and graduate nearly 156,000 stu-dents each year with undergraduate or graduate degrees in fields that could,in principle,translate into careers in semiconductor designfor example,degrees in electrical engineering(EE)or computer science(CS).Of this numbe

142、r,about 2%will enter the design workforce each year,which amounts to approximately 3,300 new hires in an average year.Largely offsetting this hiring will be annual industry-or field-level attrition of about 2,650 workersor roughly 4%of the design workforcethrough retirement(60%of attrition),emigrati

143、on(23%),and career changes(17%).(See“Semiconductor Design Workforce and Market Share Model”in the Appendix.)South Korea1TaiwanMainlandChinaIndiaUSEurope2JapanGlobal medianexcludingUS:3 16.6%R&D tax incentive rates for all industries(%)25.825.017.69.58.215.014.8Sources:ITIF;SIA;BCG analysis.Note:Tax

144、incentive rates are provided under the user cost of capital framework as promulgated by the Information Technology and Innovation Foundation(ITIF);data includes income-and expenditure-based measures and impact of federal,state,and local R&D tax incentives.1R&D tax incentives in South Korea vary and

145、can be up to 50%for certain R&D expenditures conducted by small and medium-size enterprises in select industries;the rate shown for South Korea applies to qualifying current-year R&D expenditures for small and medium-size enterprises.2Based on a simple average of rates in 20 European countries for w

146、hich data is available:Austria,Belgium,Czechia,Denmark,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Netherlands,Norway,Poland,Portugal,Slovakia,Spain,Sweden,Switzerland,and the UK.3Median of 33 countries analyzed by ITIF.Exhibit 9-R&D Tax Incentive Rates Vary Considerably in Different Regions

147、BOSTON CONSULTING GROUP 17BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 17As a result,net growth of the US design workforce will be less than 1%per year,and we estimate that the US-based design workforce will have grown to about 66,000 engi neers by 2030.As the semiconductor marke

148、t grows,however,main taining the current US market share of 46%would require a domestic design workforce of about 89,000 engineers.The shortfall of approximately 23,000 engineers(25%of the required workforce)would consist of about 90%bachelors-level or masters-level engineers and about 10%PhD-level

149、engineers.(See Exhibit 11.)Some of this talent gap can be filled via productivity im-provements,but in the bigger picture,avoiding a serious shortfall in talent requires increasing inflows of science,technology,engineering,and mathematics(STEM)gradu-ates into semiconductor design and increasing rete

150、ntion of existing talent,including women and underrepresented minorities.STEM GraduatesHistorically,US colleges and universities have offered the worlds best STEM programs.The US is home to approxi-mately half of the worlds top university programs in EE and CS,the disciplines most relevant to semico

151、nductor design.Through programs like these,the US has played an important role in educating and training both US citizens and foreign nationals in semiconductor design.Today,however,only around 19%of students pursuing degrees in the US are focusing their studies on STEMrelated fields,compared with 4

152、0%in mainland China,32%in India,30%in South Korea,and 23%in Western Europe.Moreover,US university enrollment in these areas relies to a large extent on foreign nationals,who represent 28%of all students in US EE and CS programs,and 65%of all students in EE and CS graduate programs.(See Exhibit 12.)E

153、stimated location of semiconductor design engineers from top global companies,2021South KoreaIndiaMainland China2TaiwanAmericasEMEAAsiaRest of the worldUS60,000$258 billion35,000$0 billion52,000$41 billion10,000$42 billion11,000$7 billion8,000$47 billion7,000$114 billionEuropeGlobal totals187,000Sha

154、re of global semiconductor designengineers(%)Total semiconductor design engineers3Japan14,000$47 billion$556 billionShare of global semiconductorrevenues(%)Total semiconductor revenue4Sources:SIA Factbook 2022;BCG analysis.Note:Total number of design-related positions are approximated on the basis o

155、f publicly available profiles in LinkedIn for top fabless and IDM play-ers as well as OEMs.Numbers for Mainland China,India,and Taiwan are augmented with additional government data and industry benchmarks.Numbers may be underestimated due to incomplete availability of publicly available data.EMEA=Eu

156、rope,Middle East,and Africa.1Japan design workers are calculated as design workers working in Japanese companies but not necessarily located in Japan.2Includes all members of the R&D workforce employed by local fabless companies.3Unless otherwise noted,this total excludes engineers engaged in manufa

157、cturing-related R&D.4Based on company HQs,as of 2021.Exhibit 10-Nearly One-Third of the Worlds Semiconductor Design Engineers Are Based in the US18 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPCompounding this gap in engagement,other regions are expanding their investments in STEM educati

158、on,as the following examples indicate:In 2008,South Korea established Meister schools,a new type of vocational high school focused on the semi conductor industry,with curricula tailored to local semiconductor industry needs,industrial internships incorporated into student plans,and faculty that incl

159、ude industry experts.In 2017,mainland China added STEM to its primary-school curriculum.The following year,the government launched the China STEM Education 2029 Innovation Action Plan to increase students access to STEM education.In addition,the Ministry of Education created IC doctoral programs at

160、19 universities.In 2019,Taiwans ministry of education announced a plan to increase funding for STEM education in its K-8 and 9-12 schools.Japan has established a legal requirement that the government refresh its STEM education plan every five years to support science,technology,and innovation.Althou

161、gh a full evaluation of education policy options is beyond the scope of this report,we note two potential high-level courses of action.First,the US can work to increase the number of students pursuing studies in rele-vant STEM fields,including EE and CS.Second,the US can work to increase the number

162、of EE and CS graduates who choose to pursue careers in semiconductor design.To increase the number of students engaged in EE and CS studies,the US could work on broadening general interest and improving accessfor example,by funding additional K-12 STEM education,promoting stronger inclusion of women

163、 and underrepresented minorities,providing addi-tional funding for college scholarships in EE and CS,or offering loan forgiveness for students who pursue careers in semiconductor design.(See SIAs comments in response to a request for information on the national STEM strategy.)To increase the number

164、of EE and CS students who go on to pursue careers in design,policymakers could increase tax incentives for domestic R&D,thus effectively creating a job credit;provide design-related research fellowships similar to existing National Defense Science and Engineer-ing Graduate(NDESG)and National Science

165、 Foundation(NSF)fellowships,which fund PhD studies;or provide targeted loan forgiveness for students who enter the design workforce.The US could also take steps to ensure the worlds best and brightest studentsincluding those from other regions who trained at US universitiescan readily enter the US d

166、esign workforce.Region-level immigration quotas have created a backlog of highly skilled workers who would like to work in the US but are unable to do so.The cost of these programs would vary.However,assuming an average debt load of$25,000 per student at the MS/BS level and a total program cost of$2

167、00,000 at the PhD level,closing the talent gap would require at least$1 billion in direct funding through 2030,an amount equivalent to about 1.2%of NSF funding,if FY2022 funding levels are maintained through 2030.If the US government were to provide funding,coordinated action from universities and e

168、mployers would be essential.For example,institutions would need to maintain quality as programs scaled,and employers would need to be proactively involved in the education and training of students.Taken together,these efforts would increase the profile and attractiveness of design-related careers.Ex

169、perienced EngineersEach year,about 2%of design engineers exit the US design workforce.Approximately 40%of these individuals leave to pursue opportunities in other industries,while 60%leave to take jobsincluding in designoutside the US.The private sector must take primary responsibility for retaining

170、 engineers who leave the design workforce each year but remain in the US.At the same time,however,the public sector has a large and low-cost opportunity to bolster the design workforce by encouraging inflows of semiconductor design engineering talent from outside the USfor example,by increasing or e

171、liminating regional quotas on highly skilled workers eligibility for permanent immigration.Retaining workers who leave the US could roughly double the baseline growth rate of the design workforce and meaningfully contribute to closing the domestic talent gap.BOSTON CONSULTING GROUP 19BOSTON CONSULTI

172、NG GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 19602010201520204020080TotalUndergraduateGraduate167108923711111019091215141316 17 18Share of international students(Electrical engineering and computer science)Annual change in new international studentenrollmentYearChange(pp)Share(%)Exhibit 12-US S

173、emiconductor Design Companies Rely Heavily on International Students,Whose Enrollment Numbers Are DecliningSources:Shanghai Ranking;IIE,“New International Student Enrollment:International Student Data from the 2020 Open Doors Report.”Note:pp=percentage points.While supply will growby less than 1%ann

174、ually Demand for workers isexpected to rise by 50%89,000Demand for US-baseddesign workers in 203066,000Supply of US-baseddesign workers in 203023,000Shortage of design workers in 2030,growing by 3,000 per year Meaning that demand fordesign workers will exceedsupply by nearly 35%in 2030Source:BCG ana

175、lysis.Note:Numbers are rounded for clarity and display purposes.For additional information,see“Semiconductor Design Workforce and Market Share Model”in the Appendix.Exhibit 11-The US Semiconductor Design Industry Is on Track to Face a Shortfall of 23,000 Highly Skilled Workers by 203020 THE GROWING

176、CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPChallenge 3:Open Access to Global Markets Is Under PressureUS design companies have long benefited from open access to global markets.(See How Restricting Trade with China Could End US Semiconductor Leadership.)Such access en-ables design companies to work

177、 with specialized partners in other regions and design better semiconductors for end customers.8 Global markets,in conjunction with IP protec-tions,also provide a large customer base that US design firms can use to gain scale and generate profits that they can then reinvest in design and R&D.Put sim

178、ply,open access to global markets and partners is an important com ponent of the virtuous cycle of innovation.(See Exhibit 13.)As geopolitical tensions rise,however,free and open trade is subject to challenges in the form of tariffs,export con-trols,and industrial policy.As we noted in 2020,“Broad u

179、nilateral restrictions on access to US technology would significantly deepen and accelerate US companies design share erosion”thus undermining reinvestment in R&D.Trade restrictions have profoundly negative repercussions for the semiconductor industry in the US and globally,harming all participants.

180、For example,todays US export restrictions have encouraged China to find alternative sources of semiconductor design.(See the sidebar“The Growing Semiconductor Design Eco-system in China.”)Chinese OEMs are responsible for 27%of global semiconductor demand(second only to the USs 34%)and are the most i

181、mportant non-US market for semiconduc-tors.(See Exhibit 14.)As a direct result of US export restric-tions,non-US OEMs are increasingly turning to locally de-signed semiconductors.If the EU,India,Japan,South Korea,mainland China,and other regions increasingly seek to localize elements of the semicond

182、uctor value chain,there is a real risk that large global markets will become balkanized by subscale local champions,to the detriment of all participants.Higher revenues and profitsHigher R&D investmentSuperior scaleSuperior profit marginsSuperior market shareSuperior R&D intensity18%US R&D spendinga

183、s a percentageof revenue2XHigher thanthe rest ofthe world46%US global share2XThe size of USdomestic demand59%US semiconductorgross margin+11 ppHigher than therest of the world$208 billionUS semiconductorrevenue2XMore thansecond-leadingregionUStechnologyleadershipSource:BCG analysis,using data from S

184、IA,company reports,and BCG ValueScience Center.Note:All numbers are for 2020.Revenue figures reflect weighted averages of reported financial data from top companies in each region.pp=percentage points.Exhibit 13-R&D Is Part of a Virtuous Cycle of Innovation That Supports Technology Leadership in the

185、 US8.Examples of specialized partners include manufacturers of specialized equipment,suppliers of materials,foundries,and other companies in the value chain that help designers reach end customers.BOSTON CONSULTING GROUP 21Since 2017,mainland Chinas design industry growth has been driven primarily b

186、y the rise of increasingly competi-tive Chinese fabless design firms,which now account for 16%of global fabless semiconductor sales.From 2017 to 2020,the revenue of the top 25 Chinese fabless companies doubled,from$12.2 billion to$24.4 billion.(See the exhib-it.)Venture capital investment in Chinese

187、 semiconductor companies grew more than 366%from 2019 to 2020,with approximately 70%of deals flowing to design companies.At least in part,this accelerated growth is a result of US efforts to restrict access to its market by Chinese OEMs,leading those OEMs to try to build resilient domestic sup-ply c

188、hainsan effort reinforced by Chinese government industrial policy.Government incentivesincluding direct R&D investment grants,VAT rebates,capital expenditure support,and exemption from corporate income taxeshave encouraged growth of the domestic semiconductor ecosystem in China.Realizing their criti

189、cality,both the Chinese government and Chinese industry are accelerating investments in domestic alternatives to foreign electronic design automa-tion(EDA)tools,core intellectual property(IP),and manu-facturing.Chinas National Integrated Circuit Industry Investment Fund has invested$125 million in E

190、DA and IP firms.In 2021,12 Chinese EDA companies in mainland China raised more than$310 million,a 54%increase from the corresponding 2020 figure.State-backed funds have also invested more than$2 billion into Semiconductor Manufacturing International Corporation,mainland Chinas largest domestic found

191、ry.Chinese companies are investing in domestic chip design resilience,too.In 2021,AI chip(including GPU and HPC)companiesdozens of which were founded in the past five yearsraised$4.5 billion in total funding across multiple financing rounds via 92 transactions.In addition,Chinese companies are adopt

192、ing and promoting open-source de-sign technologies such as RISC-V to avoid dependency on technologies that might be subject to export restrictions.1Increasingly,Chinas large OEMs are engaging in chip design to develop potential alternatives to the server chips sold by US companies.For example,Alibab

193、a recently announced the development of a server CPU based on advanced RISC machine(ARM),which it could deploy to its data centers,reducing its reliance on foreign semiconductors.The Growing Semiconductor Design Ecosystem in ChinaThe Revenue of the Top 25 Chinese Fabless Companies Doubled,from$12 Bi

194、llion in 2017 to$24 Billion in 2020201720202019201812.213.618.524.4CAGR+26.0%Revenue of the top 25 Chinese fabless companies,by revenue for the top 25 companiesin each year,20172020($billions)Source:SIA estimates,via official company financials.Note:The specific list of top 25 companies varies from

195、year to year;revenues for HiSiliconwhich is a privately held,wholly owned subsidiary of Huawei and is the largest Chinese fabless firm in each of these yearsare estimated.1.Open-source technologies like RISC-V are a common resource that all companies can use to create their own products.As these tec

196、hnologies develop,they provide a rising“floor”off of which companies can build.22 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPIf the US Aspires to Sustain Its Design Leadership,Public Investment and Incentives Would Go a Long Way to Catalyze Upward Momentum For the past three decades,the

197、 USs leadership in semi-conductor design has contributed significantly to the na-tions GDP(approximately$120 billion in 2020),created high-skilled jobs(approximately 173,000 in 2020),and provided a range of other benefitsfrom greater critical infrastructure security to advantages for domestic OEMs i

198、n adjacent industries.But US design leadership and its attendant benefits are not inevitable.9 Regardless of what the US government or US companies do,the semiconductor industry will grow,and semiconduc-tor design will continue to occur in the US and abroad.To maintain its leadership in design,the U

199、S must have sufficient private and public investment and a large enough workforce to maintain a market share that enables a virtu-ous cycle of reinvestment.Without action in these dimen-sions,US firms engaged in design activity are on a trajecto-ry to lose an estimated cumulative$450 billion in sale

200、s over the next ten years through market share erosion.10Global semiconductor demandby region of OEM headquarters in 2020(%)1343427912992791299USMainlandChinaEuropeTaiwan1South KoreaJapan1OtherTotalOEMs in global top 10(rank)1Huawei(3)Lenovo(4)BKK Electronics(6)Xiaomi(8)Hon Hai2(9)Samsung(2)RegionAp

201、ple(1)Dell(5)HP Inc.(7)HP Enterprise(10)Source:Charts/graphics created by BCG based on Gartner research.Source:Gartner,“Tool:Semiconductor Spending by Customer,2020,”Masatsune Yamaji,16 April,2021.Gartner is a registered trademark and service mark of Gartner,Inc.and/or its affiliates in the US and i

202、nternationally and is used herein with permission.All rights reserved.1Rank of OEMs in the global top 10 is based on global revenues in 2020 for all semiconductor devices.2Hon Hai Precision Industries,also known as Foxconn,is both an OEM and a contract manufacturer.Exhibit 14-OEMs in the US and Chin

203、a Are Responsible for More Than 60%of Global Semiconductor Demand9.GDP contribution is measured as of 2020.US design semiconductor GDP impact is calculated based on its share of the total semiconductor workforce and is based on the GDP analysis in Chipping In,a May 2021 report from SIA and Oxford Ec

204、onomics.10.US market share may decline by 10 percentage points through 2030,resulting in a potential revenue loss of$450 billion over ten years.Market share projections are modeled on the basis of the flow of design engineers by geographic region,with the assumptions that revenue and market share ar

205、e driven by R&D investment and that R&D investment is driven by the availability of design engineers.BOSTON CONSULTING GROUP 23BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 23As a starting point,given current trends,the private sector is expected to invest at an aggregate rate of$

206、400 billion to$500 billion in design R&D over the next ten years.To com-plement this commitment,the US government would need to invest an incremental$20 billion to$30 billion in tax incentives and direct funding for public R&D(equivalent to about 4%to 6%of private sector investment or roughly 40%to

207、50%of the gap between current levels of US support and average support in other regions).11 A typical mix would deliver approximately two-thirds,or$15 billion to$20 billion,of public investment via a design tax incentive.Solving the emerging workforce problem will entail taking action on two fronts:

208、making investments in STEM educa-tion and increasing the flow of talent from outside the US to train approximately 23,000 additional design engineers.Although different policy approaches would have different costs,the cumulative cost of filling this gap through end of the decade could be as little a

209、s about$1 billion.From this investment,US-headquartered design companies would generate approximately$450 billion in incremental sales,23,000 direct jobs in engineering,and 130,000 indi-rect and induced jobs in other fields,and they would fortify the USs leadership position in semiconductor design.1

210、2(See Exhibit 15 and“Return on Public Investment in Semi-conductor R&D Model”in the Appendix.)The semiconductor industry is attracting strong interest from policymakers.As governments and companies around the world make significant investments in the sector,innovation in semiconductor design is sure

211、 to continue.Public investments that address the challenges discussed in this report increase the likelihood that future design innovations will happen domestically and help preserve the benefits of design leadership that the US enjoys today.10 ppHigher US market sharein semiconductors$450 billionIn

212、 incremental salesover ten years153,000New direct andindirect jobs in 2030$20 billion to$30 billion in public investmentResearch fundingand tax incentives Open access toglobal marketsDesign talentand workforceSource:BCG analysis.Note:Market share and jobs impact is sized as of 2030;sales impact is s

213、ized over ten years.pp=percentage points.Exhibit 15-Public Investment in Semiconductor Design Can Grow Sales,Create Jobs,and Fortify US Leadership in Semiconductor Design11.Assuming an R&D intensity of$6 of revenue per$1 of R&D,approximately$75 billion of incremental design R&D is needed to prevent

214、US share erosion over the next ten years.12.The estimate of indirect and induced jobs cited here is based on analysis of employment multiples in Chipping In,a May 2021 report from SIA and Oxford Economics.24 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPAppendix Key Semiconductor Design Te

215、chnologiesThere are three major categories of semiconductors(see Strengthening the Global Semiconductor Value Chain in an Uncertain Era):Logic semiconductors are integrated circuits that serve as the fundamental building blocks or“brains”of computing.This category spans both advanced logic and more

216、mature logic,which together encompass micro-processors,microcontrollers,and other technologies that permit the execution of computing operations.Memory stores the instructions,algorithms,and data needed for operation and is deployed in all integrated circuit applications.Since data storage requireme

217、nts increase exponentially with advances in IoT,AI,and edge computing,memory capacity and bandwidth are becom-ing gating factors and require continuing innovation.Discrete,Analog,and Other(DAO)semiconductors transmit,receive,and transform information dealing with nonbinary parameters such as tempera

218、ture and voltage.Discrete products include diodes and transistors that are designed to perform a single electrical function.Analog products translate analog signals such as voices into digital signals and support many power manage-ment functions.This category also includes optical and non-optical se

219、nsors.Within these categories,companies often specialize in designing a subset of specific semiconductor types.Partly as a result,the revenue market shares controlled by differ-ent regions vary across product segments.Although region-al market share is concentrated in advanced processors,for example

220、,regional market share is more diffuse in non-optical sensors.(See the exhibit.)Semiconductor applications may require chips from more than one of the broad categories described above.Many mobile phones,for example,have almost as much DAO content(essential for features such as cellular connectivity,

221、camera functionality,and power consumption manage-ment)as logic content(which includes microprocessors that provide increasing computing power with every new phone generation)and memory(for storage of digital content on the device).Summary of the Semiconductor Value ChainAs discussed in Strengthenin

222、g the Global Semiconductor Value Chain in an Uncertain Era,the semiconductor value chain is complex and global.Each activity in the value chain re-quires differing levels of R&D investment and capital ex-penditures;consequently,each activity is responsible for a varying share of the overall value ge

223、nerated through the value chain.Precompetitive ResearchA key input for both semiconductor design and manufac-turing,precompetitive research is typically basic research in science and engineering performed by a global network of scientists from industry,universities,government-sponsored national labs

224、,and other research institutes.Frequently supported by governments and universities,pre competitive research often yields findings that are published and shared broadly,in contrast to proprietary research and development.For example,the US Depart-ment of Defenses Microwave and Millimeter Wave Inte-g

225、rated Circuit(MMIC)program in the late 1980s conducted research into new materialssuch as gallium arsenidefor use in military systems.Today,multiple companies use gallium arsenidebased semiconductors for other applica-tions,such as to enable smartphones to establish wireless communication links with

226、 cell towers.Design For a detailed discussion of this topic,(See“Design Is a Critical Part of the Semiconductor Value Chain.”)Electronic Design Automation(EDA)and Core IPSemiconductor chip design and production relies on elec-tronic design automation(EDA)software tools and flows throughout the micro

227、electronics supply chain,from initial architectural studies,implementation,verification through manufacturing,yield learning,packaging,and life-cycle management.EDA companies are trusted intermediaries between design companies and foundries.Further,semi-conductor designers make extensive use of pree

228、xisting building blocks of intellectual property(IP)for common components such as processors,standard cells,memories,and process-specific analog mixed-signal interface blocks.EDA tools and IP must be enabledthat is,tailored to a specific foundry and process.Three areas are critical for semiconductor

229、 design enablement:BOSTON CONSULTING GROUP 25BOSTON CONSULTING GROUP X THE SEMICONDUCTOR INDUSTRY ASSOCIATION 25 Design Tools.Such tools are enabled for a specific foundry,technology node,and process design kit(PDK).A foundry may have a dozen or more process technolo-gies or variants.Third-Party IP

230、Building Blocks.These building blocks are tailored for compatibility with each foundrys specific PDK as well as any extensions for low leakage,radio fre-quency,extreme environments,and so on.As such,they are critical starting points for designers to implement their designs.Reference Platforms.These

231、systems carefully combine EDA tools and IP to automate and optimize a design for power,performance and area(cost).Manufacturing Semiconductor manufacturing consists of two sets of processes:front-end wafer fabrication;and back-end pack-aging,assembly,and testing.Sophisticated equipment and materials

232、 support both sets of processes.As manufactur-ing processes improve,designers have greater scope to design better chips.Front-End Wafer Fabrication.Highly specialized semi-conductor manufacturing facilities,known as“fabs,”apply chip designs to silicon wafers.Each wafer usually contains multiple chip

233、s of the same design.The fabrication process is intricate and requires highly specialized inputs and equipment.Depending on the type of product,the process will consist of between 400 and 1,400 steps and may take 14 to 20 weeks to complete.883128275813181057415139266352279151011341052811309931585918

234、Analog5Memory3Advanced processors13Other logic2Discrete4Optoelectronics6Non-optical sensors7Revenue market share by region of company headquarters in 2020(%)EuropeSouth KoreaJapanMainland ChinaOtherTaiwanUSLogicDAOMemorySource:Charts/graphics created by BCG based on Gartner research.Source:Gartner,“

235、Market Share:Semiconductors by End Market,Worldwide,2020,”Andrew Norwood et al.,31 March 2021.Note:Regional market share calculations are based on revenues of the final company to sell the finished semiconductor.DAO=discrete,analog,and other.Because of rounding,not all bar segment totals add up to 1

236、00%.1Includes CPUs,GPUs,DSPs,discrete application/multimedia,and FPGA/PLD.2Includes microprocessor embedded,microcontroller 32-bit,microcontroller 16-bit,microcontroller 8-bit display driver,and other logic.3Includes DRAM,emerging memory,other memory,flash memory,and NAND.4Includes transistors,other

237、 discretes,and diodes.5Includes voltage regulator/reference,power management,wireless connectivity,discrete cellular baseband,RF front-end and transceivers,integrated baseband/application processor,wired connectivity,data converter/switch/multiplexer,other application specific,and other analog.6Incl

238、udes image sensor CMOS,image sensor CCD,other optoelectronics,photosensor,LED,coupler,and laser diode.7Includes magnetic sensors,other sensors,MEMS microphones,fingerprint sensors,environmental sensors,and inertial sensors.The US Leads in the Design of LogicEspecially Advanced Processorsbut Lags in

239、Optoelectronics and Other Sensors26 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPDesign and front-end wafer fabrication are closely linked.During the design process,initial work is done on an elec-tronic,software-based model of the chip.Fabs then provide test silicon to validate the elect

240、ronic model and provide vital input on the designs manufacturability.Close collabo-ration is critical:scaling up new processes involves inher-ent uncertainties in modeling and reaching target manu-facturing yields.Design engineers and wafer fabrication engineers use PDKsessentially documentation of

241、fabri-cation processesand work together to debug design features and verify that manufacturing processes and chip designs are compatible.Back-End Packaging,Assembly,and Testing.Semi-conductor assembly companies convert silicon wafers into finished chips to be assembled into electronic devices.Silico

242、n wafers are sliced into individual chips,packaged,rigorously tested,and then shipped to electronic device manufacturers.Equipment and Materials Semiconductor manufacturing uses more than 50 types of sophisticated equipment for front-end and back-end pro-cesses.Lithography tools,which are critical f

243、or producing advanced chips,represent one of the largest capital expen-ditures for fabrication players.Semiconductor manufactur-ing also uses as many as 300 specialized materials.Types of Semiconductor Design Activities There are two major types of semiconductor design activity:Hardware Design.Semic

244、onductor hardware goes through a multistep design process that involves produc-tion definition and specification,system design,integrat-ed circuit design,and post-silicon validation.These steps were illustrated in Exhibit 3 of the main text.Software Development.Software development in-volves the cre

245、ation of firmware,a type of software that is embedded on hardware to provide low-level control over specific functions such as operating a camera.Firmware can enable higher-level software such as an operating system,it can interact with and control a specific device,or it can work as a standalone if

246、 the device is sufficiently simple.Software development may also involve the cre-ation of platforms and software development kits(SDKs)that other companies can use to build complex function-ality such as AI vision systems.Semiconductor Design Workforce and Market Share ModelThe semiconductor design

247、workforce and market share model analyzes semiconductor design workforces in vari-ous regions of the globe:Europe,India,Japan,mainland China,South Korea,Taiwan,the US,and the rest of the world.The model also analyzes the current US-based semiconductor design workforce,along with trends that will imp

248、act its size in the coming years,to project the size and skills of the US semiconductor design workforce in 2030.This model supports the projections identified in Exhibits 5 and 11 of the main text of this report.The model evaluates current and projected trends in the productivity of semiconductor d

249、esign workers,considering their skills,employers,regions of residency,and other factors.The model also considers revenue growth rates for the global semiconductor industry,and it integrates this information to project the revenue market shares of each region in 2030.For the US-based workforce,inflow

250、 trends that the model considered include new graduates in semiconductor-related fields,rates of entry into semiconductor industry,and immigration.The outflow trends that it considered include retirements,exits from the industry,and voluntary and involuntary emigration.The model also takes into acco

251、unt the different skills needed in semiconductor de-sign,including but not limited to education levels(for example,PhD degree holders versus bachelors degree holders)and subdomains of expertise(for example,soft-ware specialists versus hardware specialists).In addition to forecasting on the basis of

252、existing status quo trajectories,the model uses scenarios to assess the impact of changes in individual variables on supply of and demand for US-based semiconductor design engineers in 2030.For additional information,please contact the authors.BOSTON CONSULTING GROUP 27BOSTON CONSULTING GROUP X THE

253、SEMICONDUCTOR INDUSTRY ASSOCIATION 27Return on Public Investment in Semiconductor R&D ModelThe return on public investment in semiconductor R&D model analyzes impacts of public investment on the US economy under various scenarios.This model supports the reports estimates of returns on public dollars

254、 invested.The model analyzes the growth of global and US semi-conductor industry revenues through 2030 on the basis of industry forecasts and financial data.It examines the composition of the US semiconductor industry,the share of design activity that occurs in the US,and the expected level of inves

255、tment in design and R&D,combining this information with findings from academic studies on the direct,indirect,and induced impacts of new R&D invest-ment on GDP and jobs.The model then integrates with analyses in the semiconductor design workforce model to consider changes in the size and skills of t

256、he US design workforce over time and the impact of workforce changes on the return on public investment.For additional information,please contact the authors.28 THE GROWING CHALLENGE OF SEMICONDUCTOR DESIGN LEADERSHIPAbout the AuthorsRamiro Palma is a managing director and partner in the Austin offi

257、ce of Boston Consulting Group and is the global co-leader of the semiconductor topic.You may contact him by email at .Raj Varadarajan is a managing director and executive partner in BCGs Dallas office and is deeply engaged in the firms work in the semiconductor sector.You may contact him by email at

258、 .Aniket Patil is a project leader in the firms Dallas office.You may contact him by email at .Thomas Lopez is a principal in BCGs Dallas office.You may contact him by email at .Jimmy Goodrich is the vice president,global policy at the Semiconductor Industry Association.You may contact him by email

259、at jgoodrichsemiconductors.org.AcknowledgmentsThis report would not have been possible without the contributions of our BCG colleagues Austin Jung,Trey Sexton,Amit Rai,and Minhal Dhanjy,as well as our SIA colleagues Susie Zhi Su and Robert Casanova.Boston Consulting Group partners with leaders in bu

260、siness and society to tackle their most important challenges and capture their greatest opportunities.BCG was the pioneer in business strategy when it was founded in 1963.Today,we help clients with total transformationinspiring complex change,enabling organizations to grow,building competitive advan

261、tage,and driving bottom-line impact.To succeed,organizations must blend digital and human capabilities.Our diverse,global teams bring deep industry and functional expertise and a range of perspectives to spark change.BCG delivers solutions through leading-edge management consulting along with techno

262、logy and design,corporate and digital venturesand business purpose.We work in a uniquely collaborative model across the firm and throughout all levels of the client organization,generating results that allow our clients to thrive.Uciam volora ditatur?Axim voloreribus moluptati autet hario qui a nust

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265、ctur autemost,vendam am ellania estrundem corepuda derrore mporrumquat.Add Co-Sponsor logo hereFor information or permission to reprint,please contact BCG at .To find the latest BCG content and register to receive e-alerts on this topic or others,please visit .Follow Boston Consulting Group on Facebook and Twitter.Boston Consulting Group 2022.All rights reserved.11/22