In February 2019, the year before the outbreak, the SIA(Semiconductor Industry Association of America) announced that in 2018 alone, a record number of chips had been sold "in excess of 1 trillion." According to a recent report in the Wall Street Journal, semiconductors are the fourth most traded product in the world, after crude oil, refined oil products and automobiles.
This was followed by U.S. President Joe Biden's statement explicitly calling chips "infrastructure," confirming that there is no ambiguity about the fact that semiconductor chips, which are in high demand, are the new common currency. Their ability to perform millions of complex operations and their energy efficiency have made semiconductors a key component of almost every industry, driving the global economy.
Today, a smartphone has far more computing power than the computer NASA used to put a man on the moon in 1969. What's more, almost all emerging technologies such as ARTIFICIAL intelligence, cloud computing, quantum computing, advanced wireless networks, blockchain applications, bitcoin mining, 5G, Internet of things, self-driving cars, drones, robotics, gaming and wearables are driven by these discrete technologies. But highly complex semiconductors. According to a new report from Juniper Research, the number of Iot devices alone will reach 46 billion by the end of 2021. Each of these devices will be powered by a semiconductor.
Semiconductors are critical for high-computing applications in electronics and manufacturing, agriculture, healthcare, infrastructure, entertainment, telecommunications, transportation, energy management, military systems and aerospace.
A pillar of multiple industries
Start with the most important healthcare -- semiconductors are an integral part of clinical diagnostic, therapeutic, and post-rehabilitation intervention applications. Semiconductor devices such as magnetic resonance imaging (MRI) machines, pacemakers, blood pressure monitors, blood gas analyzers, wireless patient monitors and ventilators save lives every day. Some surgical procedures are being revolutionized by the use of robotic surgical systems that support chips.
For Covid care alone, test equipment, oxygen monitors and almost all life support systems rely on semiconductors. In addition, the cross-country distribution of vaccines, app-based certification, drones delivering life-support drugs, providing a steady stream of data to the COVID-19 war room -- all rely on silicon wafers.
Market research forecasts suggest that web-integrated wireless healthcare devices, 3D printing of wearables and organs, and medical devices equipped with semiconductors will be key factors to ensure the delivery of new and creative healthcare approaches in the future. The global automotive semiconductor market was worth $48.13 billion in 2020 and is expected to reach $129.17 billion by 2026.
Automakers are integrating automotive electrical systems that require power diodes and regulators with superior reliability. Automotive semiconductor ics with different functions are used in a variety of automotive products, such as navigation controls, infotainment systems, and collision detection systems. A modern connected self-driving car could easily have more than 3,000 chips with the latest technology capabilities. In situations where the current pandemic forces "everything remotely" -- whether for business, study, entertainment or communication with friends and family -- semiconductors support the technical infrastructure needed to maintain communications networks, rather than traditional physical environments.
During this pandemic, organizations were able to smoothly move their operations online with the help of digital, semi-conductor driven devices and technologies and allow individuals to work safely and remotely without interference. This digital transformation has opened up a new world of opportunity for the semiconductor industry
Rides on a chip
Emerging technologies, especially the Internet of Things, artificial intelligence, augmented and extended reality, and blockchain, are increasingly prominent in various industries. As these applications gain more attention across the spectrum, the need for dedicated sensors, integrated circuits, improved memory, and enhanced processors is increasing.
Many smart cities around the world are committed to dramatically improving urban services and critical civic infrastructure for their citizens. To do so, they need to connect almost all aspects of municipal infrastructure to a variety of devices, which in turn will be connected to individuals. This interconnected infrastructure will be powered by semiconductors.
Fifth-generation mobile networks are designed to connect almost everyone and everything -- machines, objects and devices; Provide peak data speed; Achieve ultra-low delay; Higher reliability; Massive network capacity; Higher usability and a more unified user experience. At the heart of this next generation of technology, cutting-edge semiconductor chips with smaller nodes and greater efficiency will provide critical, fast, and high-performance computing.
Advances in semiconductor technology
The dividing line between mid - and mid - to high-end integrated circuit (IC) manufacturing is 12/16 nm and 7 nm process technologies. They are used in applications such as central processing units, graphics processing units, artificial intelligence and in products such as televisions, air conditioners, automobiles, high-speed trains, satellites, industrial robots, elevators and drones.
Advances in semiconductor technology have seen the introduction of 5 nm technology, which is smaller and faster than previous generations of chips.
With IBM recently introducing the world's first 2 nm chip manufacturing technology (45% faster and 75% more energy efficient than the mainstream 7 nm chips used in many laptops and mobile phones today), the industry is looking to unlock higher performance and energy efficiency in the future.
Complex chip production
Chip production itself is a complex process involving multiple country/region dependencies. From chip design to the procurement of basic raw materials to the manufacturing, assembly, testing, packaging, storage and final delivery of semiconductors customized for different industries, the process can involve more than 1,000 steps and 70 national border points. Currently, the proprietary technology and ability to execute from Alpha to Omega depends on professional global leaders such as Intel, TSMC and Samsung as well as a number of others.
In the current global context, the United States, with its world-class universities and engineering talent and market-driven innovation ecosystem, provides most of the R&D intensive activities such as electronic design automation, core intellectual property, chip design, and advanced manufacturing equipment and capital investments.
Regions such as Taiwan, Mainland China and South Korea are leading the way in wafer manufacturing, features that require significant capital investment, strong infrastructure and skilled manpower. Taiwan is also a leader in semiconductor assembly, packaging and testing functions, followed by China and Malaysia, which are less skill and capital intensive.
Global Chip Crisis
The COVID-19 crisis has led to widespread shortages of chips around the world, opening holes in the global semiconductor supply chain and putting many technologies and products critical to our daily lives at risk.
The main reasons for this shortage include underinvestment in wafer capacity in previous years, supply chain disruptions due to the COVID-19 pandemic, increasing demand for new technologies such as artificial intelligence and electric vehicles, and increased demand for work from home (WFH) products.
Add to that drought in Taiwan (some of the world's largest and most advanced high-tech foundries rely on water-intensive manufacturing processes for their water allocation) and growing geopolitical uncertainty over trade with China.
Way forward
The good news is that several founder-makers, including TSMC, Intel and GXIC, are investing billions of dollars to upgrade equipment and build new production lines to meet surging demand and supply shortages for "feature-rich" chips.
TSMC recently unveiled the industry's largest-ever investment, allocating $100bn over the next three years to boost capacity. Intel has pledged $20 billion for two Sites in Arizona and says it will make further investment commitments this year. South Korea's Samsung Electronics has set aside $116 billion in investments by 2030 to diversify its chip production.
India is also finalising plans to mass-produce semiconductor chips as part of its "Make in India" programme. The country is offering more than $1 billion in cash to each semiconductor company that sets up a manufacturing unit in the country. Locally made chips will be designated as "trusted sources" and can be used in products ranging from CCTV cameras to 5G equipment. In December, India invited "expressions of interest" from chipmakers about setting up manufacturing units in the country or acquiring such units.
It's all about achieving self-sufficiency in semiconductor manufacturing, ensuring better control over data security and preventing countries around the world from being held to ransom by specific members of the existing semiconductor supply chain.
It is clear that semiconductors are changing the rules of the game in our modern, fast-moving world. Clearly, the semiconductor industry faces new challenges. To be more clear, governments around the world are now in crisis management mode, and in the near future semiconductors will gain "critical infrastructure" status in most countries.