A Look at the Global Semiconductor Industry: What’s Next?
Semiconductors are essential to modern technology, and the industry that produces them is booming.
Semiconductor manufacturing is experiencing a massive shift as the industry moves beyond its traditional gate structure to a more integrated programmable device approach called programmable logic.
This shift is driving a new era of semiconductor design, ramping up production of advanced, cost-effective products such as microprocessors, memory, FDSOIT and sensors at lower cost. The global semiconductor market generated revenue of $285 billion in 2017 and is expected to reach $410 billion by 2024. With this growth comes an increasing need to understand the current state of the market as well as where it’s going next. This blog post looks at some key trends in the semiconductor industry and what they mean for your business operations.
Semiconductor Manufacturing Basics
Semiconductor manufacturers produce silicon-based integrated circuits (ICs) based on designs created by semiconductor designers. These devices are used in everyday products and are critical to the operation of the internet and global economy. This industry is highly cyclical. It experiences significant ups and downs as demand for semiconductors fluctuates based on economic conditions, technological developments, product life cycles and other factors.
One of the most important factors affecting the semiconductor industry is the rate at which companies design new products and replace old ones. This rate is called the product cycle. When demand rises due to an increase in product sales (or an overall increase in the economy), semiconductor manufacturers produce more silicon wafers per month.
These wafers are then cut into individual chips and packaged for sale. The semiconductor manufacturing industry is highly fragmented, with about 120 companies around the world producing about $350 billion worth of products each year.
Programmable Logic and FDSOIT
Fully depleted silicon-on-insulator (FDSOI) has been the dominant architecture for programmable logic devices (PLDs) for more than a decade. This technology has been critical in the proliferation of programmable logic devices in all industries, but the increasing complexity of designs and decreasing yields have left chipmakers seeking an alternative to FDSOI.
Advanced logic devices (ALD) offer a new architecture that promises lower power, higher performance and lower cost.
These devices are made using single-wafer silicon-on-insulator (SIS-COI) technology, which enables both n- and p-type materials to be deposited on the same wafer.
AI and Edge Computing: How Will They Shape the Future?
These architectures are enabling new levels of innovation in FPGAs, high-end SSDs and ASICs. This will reshape the design landscape and increase design complexity, which will result in higher costs for design teams.
FPGAs are excellent for general purpose computing tasks that don’t require high-performance computing. With these devices, you can implement complex algorithms like artificial intelligence and machine learning algorithms.
This is especially useful for IoT edge applications because it reduces the amount of data that needs to be sent to the cloud for processing. A few key benefits of edge computing include lower latency, reduced energy consumption, lower capital costs, and the ability to process more data in real time.
Bottom-up (BULKY) vs. Top-down (SMALLER) Chips
In general, the semiconductor industry will continue to shift towards smaller, more advanced chips. In other words, the industry will move away from larger, more general-purpose products and towards smaller, more specialized ones.
This represents a shift from bottom-up to top-down designs. Bottom-up semiconductor design will produce more complex semiconductor devices, while top-down design will produce smaller and denser semiconductor devices.
Bulk silicon has dominated the semiconductor industry for decades, but it’s reaching the end of its life cycle and moving toward a more silicon-on-insulator (SOI) build-out. These smaller, more advanced chips will consume less power and generate less heat, which will have a significant impact on design complexity and production costs.
What’s Driving Growth in the Semiconductor Industry?
Chinese semiconductor manufacturers are growing in prominence, making up almost a third of the total revenue generated in the global market. This is a big change from just a few years ago, when they accounted for only 15% of the total revenue.
These companies are investing heavily in R&D and building advanced semiconductor manufacturing facilities. Chinese manufacturers have seen their revenue grow by an average of 14.4% per year since 2010.
The semiconductor industry is also benefiting from the emergence of new technologies, such as artificial intelligence (AI), edge computing, and 5G. These technologies are rapidly driving up demand for semiconductor products, especially in the communications and computer industries.
Key Challenges for the Future of the Semiconductor Market
One of the biggest challenges for the semiconductor industry is the looming capacity shortage. This is primarily driven by a rapid increase in demand for chip manufacturing capacity from Chinese semiconductor manufacturers.
Unfortunately, the demand for capacity far exceeds the global supply of production facilities, meaning some companies will have to wait a long time to get their chips manufactured.
This could have significant implications for the semiconductor industry, especially since it’s already facing a challenging global economic environment. And though these challenges may seem daunting, they won’t affect the semiconductor industry as a whole. Instead, they will affect individual companies in the industry as they compete for limited production facilities.
The semiconductor is expected to continue growing in the next few years. This growth is due to an increase in demand for semiconductor products such as artificial intelligence, advanced logic devices and edge computing.
These products are driving up demand for semiconductor manufacturing capacity, which is creating a looming capacity shortage. To stay competitive in this market, it’s critical to understand how to navigate these challenges.
Semiconductor OEMs and manufacturers should be prepared for increased demand, and they should be ready to act quickly. Doing so will help ensure that the business is not negatively impacted by the looming capacity shortage and other challenges facing the semiconductor industry.