Semiconductor industry in the throes of change – greater resilience, improved autonomy, new technologies
The last few months have shone a light on the role that semiconductors play in our economy. First came the US-China trade conflict and the 2019 economic downturn, then the COVID-19 outbreak – all of this threw supply chains around the world into disarray. What’s more, many semiconductor factories in the Asia-Pacific region scaled back their operations. In other parts of the world, factories have been affected by natural disasters such as hurricanes or earthquakes. At the same time, demand for chips is constantly on the rise – according to current estimates by the German Electrical and Digital Manufacturers’ Association (ZVEI), growth in the market for power semiconductors alone will triple by 2030. At times, this level of growth results in considerable supply bottlenecks for semiconductors and chips.
That being said, there are also internal reasons for the supply difficulties in the semiconductor industry: The group of companies that generates the lion’s share of global semiconductor sales is a small one (read more about this on page 22). In computer chip manufacturing, around 70 percent of global turnover is generated by a mere two companies. On top of that, many semiconductor companies do not have their own factories, preferring instead to have manufacturing done in Asia. Almost every fourth chip is manufactured in China – but for the most part not on behalf of Chinese companies.
To stabilise supply chains and reduce dependencies, more and more countries are planning to move manufacturing operations back to their own countries. For example, the USA plans to invest around 52 billion US dollars over the next decade to bolster the domestic semiconductor industry. The EU is also planning to establish greater autonomy in the field of semiconductors with its own “European Chips Act” (read the interview with the European Commissioner for Internal Market, Thierry Breton, on page 8).
For chip manufacturers, these investments, combined with consistently high demand and lower levels of supply, mean that the prospects are dazzling. According to the World Semiconductor Trade Statistics organisation, global semiconductor sales grew by 25.6 percent in 2021 alone, to 553 billion US dollars. According to Fortune Business Insights, sales are expected to exceed 800 billion US dollars by 2028.
With the substantial investments from the industrial and political spheres, semiconductor technology will also continue to develop: New materials and chip architecture, the shift to 450-millimetre wafers, 5-nanometre components with 3 or 2 nanometres already in the pipeline – all of this shows that Moore’s Law has plenty left in the tank (cf. page 38). Innovations that seemed inconceivable just a few years ago are now a reality.
The multitude of different developments in the semiconductor industry and semiconductor technology present tremendous opportunities. EBV Elektronik would be more than happy to help you make the most of them. For now, I hope this makes for exciting reading. It’s time to immerse yourself in the world of semiconductors!
Thomas Staudinger
President of EBV Elektronik