The Trends, Innovations, and Complexities of the Semiconductor Industry - ECE-180D-WS-2024/Wiki-Knowledge-Base GitHub Wiki
Introduction
Commonly referred to as the backbone of the technology industry, semiconductors play a crucial role in processing, storing, and transmitting information within electronic systems. The U.S. semiconductor industry had a meteoric rise in the 1990s, asserting technological superiority amidst increased investments in semiconductors [1]. Although this boom in investment was shortlived due to Taiwan Semiconductor Manufacturing Company (TSMC) usurping Intel, the United States is aiming to make a comeback with the newly enacted 2022 CHIPS and Science Act, which promises $280 billion in funding over the next ten years [2]. Aiming to reverse the decline in U.S. semiconductor manufacturing, the CHIPS and Science Act will aid new research and development in the United States. Despite a rocky end to 2023, the Semiconductor Industry Association (SIA) is optimistic the industry will bounce back stronger, with global chip sales forecasted to rise 13% in 2024 [3].
Current Landscape
Market Overview
The semiconductor industry is a pivotal force in the global economy. In its current state, the IDC estimates the 2024 worldwide semiconductor market revenue to exceed $630 billion, over a 20% growth from 2023 [4]. Key players in this industry include Intel Corp., Samsung Corp., NVIDIA Corp., Texas Instruments Inc., and Broadcom Inc., who make up the top five in order of market share [5]. Of these five global leaders, four companies are from the United States. When it comes to production, however, TSMC and the United Microelectronics Company are the “world’s leading manufacturers of semiconductor chips” [5]. The market itself is segmented based on diverse applications, ranging from consumer electronics and automotive to healthcare and industrial sectors.
CHIPS and Science Act
The CHIPS and Science Act is crucial to the growth of the semiconductor industry in the United States. With the U.S. only producing 12 percent of the world’s semiconductors today in comparison with 37 percent in the 90s, a majority of U.S. corporations are now reliant on chips produced abroad [2]. This regression of domestic chip production and the shortages of semiconductors has “dented U.S. economic growth” and has slowed down industries reliant on this technology [2]. The CHIPS and Science Act serves as a helping hand to ensure the expansion of domestic manufacturing in advanced semiconductors [2]. According to the funding splits listed, “the Department of Commerce will oversee $50 billion in investments over five years, including $11 billion for advanced semiconductor R&D and $39 billion to accelerate and drive domestic chip production” [2]. The CHIPS and Science Act will also boost national security and 5G supply chains by allocating $2 billion to “the U.S. Department of Defense to fund microelectronics research, fabrication, and workforce training” and $1.5 billion to the USA Telecommunications Act of 2020, which aims to “enhance competitiveness of software and hardware supply chains of open RAN(radio access network) 5G networks[2]. In essence, the CHIPS and Science Act represents a strategic investment in the future of American innovation, bolstering domestic semiconductor production and fortifying infrastructure for the advancement of both industry and society.
Figure 1: Funding splits for the CHIPS and Science Act 2022-2026 [2]
Trends in the Semiconductor Industry
Arguably the most prominent and significant development is the integration of artificial intelligence (AI) into semiconductor design. With the rise of AI comes many demands with lasting impacts on semiconductor production. Since AI chips require speedy movement of data in and out of memory, they tend to be quite large [6]. These memory needs create production limitations for vendors who need to manufacture a specialized AI chip for different applications [6].
Another source of increasing demands is the proliferation of Internet of Things (IoT) devices, with smart homes forcing the semiconductor industry to emphasize the development of IoT-specific solutions such as low-power microcontrollers and sophisticated sensors. The trend of smart homes increases the need for these devices and has propelled the market size to grow at a projected compound annual growth rate of 27.07% between 2023 and 2030 [7]. The widespread adoption of 5G is also reshaping the semiconductor landscape, as the demand for components supporting high-speed connectivity surges. Semiconductor manufacturers are not only tasked with meeting this escalating demand but also with unlocking the full potential of 5G networks. The interplay of producing components that can operate harmoniously between these trends requires a balance between performance, energy efficiency, and adaptability to ensure that semiconductors play a central role in shaping the interconnected future of technology. Furthermore, the convergence of these trends leads to the emergence of market fragments and specialized niches. While IoT devices demand sensors with low-power operation and energy-efficient microcontrollers, the requirements for 5G components prioritize high-speed data processing and low latency. This dichotomy in demands necessitates semiconductor manufacturers to navigate through specialized applications. Moreover, as emerging technologies begin to develop, the demand for specialized semiconductor solutions will expand and further diversify the market.
The semiconductor industry is also witnessing a transformative trend driven by the increasing demand for automotive chips, particularly in modern vehicles equipped with autonomous driving capabilities. These advanced vehicles necessitate sophisticated electronic solutions to enhance connectivity, sensor performance, and battery efficiency. As a result, there is a growing need for specialty high-performance computing (HPC) chips capable of supporting real-time and complex analytics.
Startups are at the forefront of this trend, developing chip systems are designed to respond swiftly to unexpected changes such as traffic stops or accidents. These automotive chips feature multiple, interconnected sensors and centralized electrical architectures, significantly improving driver and surroundings monitoring. For instance, Yuntu Semiconductor, a Chinese fabless startup, produces automotive-grade chipsets [12]. Their focus on integrated circuit design allows them to offer custom chipset solutions that provide high stability and security, essential for automotive control. Yuntu's auto-level microcontrol unit (MCU) chips are used in various applications, including electrical control units (ECUs), engines, fuel systems, infotainment systems, and autopilot systems. Lidwave, an Israeli company, also develops automotive System-on-Chips (SoCs) with a patented sensing architecture ideal for the 3D perception industry [12]. Lidwave's lightweight SoC with time-based sensing technology facilitates the production of LiDAR solutions without bandwidth limitations. This innovative 3D sensing technology enhances driver assistance systems, making them safer and more reliable.
Innovations Shaping the Industry
Two innovations on the cusp of redefining the boundaries for computational power and manufacturing precision are quantum computing and extreme ultraviolet lithography (EUV). Quantum computing leverages the principles of quantum mechanics to achieve a higher power ability. While classic computers would scale their power 1:1 in tandem with the transistors in the system, quantum computers, which utilize qubits (quantum bits), have exponentially increasing power since qubits can represent both 0 and 1, a feature classic boolean algebra bits do not have [11]. With harnessing qubits being the main goal, semiconductor manufacturers are beginning the development process of producing quantum computing chips to execute algorithms and tasks at an exponentially faster rate than classical computers [8].
Meanwhile, extreme ultraviolet lithography (EUV) has emerged as a game-changing manufacturing process for semiconductor fabrication. EUV utilizes shorter wavelengths of light to create patterns that are less than 12 nanometers in size, “at least three times smaller than previous lithography technologies” [9]. Nowadays, however, the introduction of high numerical aperture (or high NA) EUV lithography which supports higher-resolution patterns to be printed on a wafer with larger optics has allowed for 2-nanometer nodes to be etched into chips in a way that would be conducive to mass production [9]. These innovations can shape the industry to allow for smaller and more computationally powerful semiconductors.
Furthermore, advanced packaging technologies shape the semiconductor industry by boosting chip power, performance, and cost efficiency. Packaging innovations enable the integration of multiple components into a single device, enhancing signal connections and creating more compact designs. Leading techniques include multi-chip modules, 3D ICs, 2.5D ICs, fan-out packaging, and system-in-package (SIP) [12]. These methods expedite data transfer by shortening signal travel distances, critical for high-speed data processing and efficient energy use in modern electronics.
Numerous companies are making strides in this space. For example, Thermal Shutdown (TSD) Semiconductor is a pioneering Chinese company, that excels in manufacturing advanced packaging machines [12]. TSD Semiconductor's product lineup includes wafer grinding, chemical and mechanical cleaning, lapping, and polishing machines, all essential for processes like flip chip assembly, wafer bumping, and SIP production. Their state-of-the-art surface processing equipment enables chip makers to thin the die, significantly enhancing semiconductor properties and electrical performance, thereby driving the development of highly efficient and powerful chips.
In addition to packaging innovations, cooling solutions are crucial for maintaining the performance and longevity of high-power microelectronics. JetCool, an American company, provides an advanced fluid-to-package cooling solution that utilizes micro-convective liquid cooling technology [12]. This innovative method employs arrays of fluid jets to cool chip surfaces, significantly enhancing heat transfer. By eliminating the need for thermal pastes and interface materials, JetCool's direct-to-chip cooling solution saves space and improves the overall efficiency of the cooling process. This is particularly important as chips become more powerful and generate more heat, requiring effective thermal management to prevent overheating and ensure stable operation.
The advancements in advanced packaging and cooling technologies underscore the dynamic evolution within the semiconductor industry. As the demand for more powerful and compact electronic devices continues to grow, the importance of advanced packaging and effective cooling solutions will only increase, driving further innovation and development in the semiconductor sector.
Complexities and Challenges
The semiconductor industry confronts multiple challenges as it grapples with complexities inherent in sustaining Moore’s Law and advancing semiconductor technology. Moore’s Law, an observation on the doubling of the number of transistors on integrated circuits every two years, has served as a guiding principle in the industry since 1965. However, the relentless pursuit of miniaturization faces physical and technological barriers. As it stands, “semiconductor technology rapidly approaches the limitations of Moore’s Law” [5]. With Moore’s Law having less relevance in today’s industry, semiconductor manufacturers are turning to new methods for efficiency such as packaging. Certain issues such as quantum tunneling, increased power consumption, and heat dissipation challenges pose formidable complexities as well. Furthermore, another challenge the semiconductor industry faces is the increasing cost of manufacturing. This constant rise in cost has led to the dominance of large-scale chip manufacturers/designers, such as TSMC and Samsung, not allowing for fair competition in the market space and driving down innovation.
Figure 3: Graph from Our World in Data. Number of transistors present on microchips per year
Conclusion
The semiconductor industry poses a unique nexus of challenges and opportunities. It is here where the relentless pursuit of Moore’s Law meets the frontier of technological innovation. While the challenges in increased costs of manufacturing and the miniaturization goals of new technology demand inventive solutions, the industry is propelled forward by groundbreaking advancements such as quantum computing and extreme ultraviolet lithography. The advancement of IoT, 5G, and AI also push the industry to new heights, with McKinsey research estimating the increased demand for specialized components will make semiconductors a $1 trillion industry by the end of the decade [2]. With the CHIPS and Science Act underway, it is an exciting time for advancements in the U.S. semiconductor manufacturing realm, signaling a strategic and pivotal initiative to bolster domestic semiconductor capabilities.
References
[5] https://irds.ieee.org/topics
[6] https://irds.ieee.org/topics/semiconductors-and-artificial-intelligence
[8] https://www.rochester.edu/newscenter/challenges-silicon-spin-qubits-quantum-computing-573732/
[9] https://research.ibm.com/blog/what-is-euv-lithography
[12] https://www.startus-insights.com/innovators-guide/semiconductors-trends-innovation/