U.S. Share of Sales for Chip-Makers Up : Technology: The firms’ share of worldwide chip equipment sales rose from 42.8% in 1990 to 47.1% in 1991, reversing a 10-year decline, a study finds.
American companies’ share of the strategically important computer chip equipment business edged upward last year, a market research firm said Wednesday, reversing a decade-long decline and providing some evidence that the controversial Sematech chip technology consortium is helping to improve U.S. competitiveness.
According to San Jose-based VLSI Research, U.S. companies garnered 47.1% of worldwide chip equipment sales in 1991, up from 42.8% in 1990. Japanese firms saw their share slip from 48.7% in 1990 to 47% last year.
Some of the progress by U.S. companies appears to be the result of changes in the mix of equipment that chip producers purchased last year, when few new chip factories were started. And the market research firm Dataquest, which also released a chip equipment study Wednesday, said U.S. companies have stemmed the erosion of market share but have not yet begun to regain ground.
Still, analysts agreed that U.S. firms appear to be making a comeback. “My general feeling is that the decline has plateaued, and the U.S. has reached equilibrium,” said Krishna Shankar, who follows the chip equipment business for Montgomery Securities. “But there’s still a way to go before U.S. companies gain market share.”
Chip-making gear is a small but crucial industry because it forms the first link in the “food chain” of electronics: Leading-edge computers and consumer electronics devices can’t be built without leading-edge chips, and leading-edge chips can’t be built without leading-edge production equipment.
American firms controlled 75% of the worldwide chip equipment market as recently as 1980, but they’ve been losing ground rapidly since then.
Sematech, which receives $100 million a year in government funding and an equal amount from 12 chip producers, has over the past several years focused much of its attention on bolstering the domestic chip equipment industry.
Sematech Chief Executive William Spencer, who joined with VLSI in announcing the market share numbers, said the study “shows that the concept of industry and government and academia working together for the common good can succeed in America.”
The market share data comes at an opportune time for Sematech, which is now asking Congress to approve government funding for another five years--at $100 million a year.
Measuring Sematech’s effectiveness has always been a tricky task, and analysts and industry executives acknowledged that VLSI’s market share figures were less than conclusive.
Craig Barrett, chief operating officer at Intel and a strong Sematech supporter, noted that it was “very difficult to judge the exact impact of Sematech.” But he said Intel had purchased $150 million worth of U.S. equipment over the past several years that would have been bought from Japanese companies were it not for Sematech.
Peggy Wood, head of the chip equipment group at Dataquest, pointed out that there were many factors at play in the improved performance of U.S. companies. American companies have benefited from Japanese chip producers’ shift to specialty products that require multiple layers of metal, she said, and American companies are leaders in providing the advanced “chemical vapor deposition” machines needed to make such chips.
