Semiconductor IndustryIn the past few decades, the growth of the global semiconductor industry has been driven largely by the demand for cutting-edge electronic devices such as desktops, laptops, and wireless communication products, and by the rise of cloud-based computing. Growth will continue with new application drivers for the high-performance computing market segment.

Sustainability

The demand for semiconductors has never been greater and is expected to keep increasing due to emerging technologies such as 5G, AI, and the Internet of Things (IoT). To meet this demand, semiconductor production would need to increase, which would cause a massive surge in energy consumption and water usage. A single semiconductor fab can consume up to 1 TWh of energy per year and two-to-four million gallons of ultra-pure water per day. Industry leaders such as TSMC and Intel are taking proactive steps and have been working on substantial sustainability programs.

Continued Chip Shortage

The global semiconductor chip shortage has disrupted most industries and constrained supply chains. Automotive and consumer tech manufacturers have felt the biggest strain of reduced chip availability as many have been forced to delay product launches resulting in expected revenue loss. As demand for chips continues to soar, supply chains could remain constrained for the foreseeable future. That means everyone as semiconductor businesses and their customers should focus on building more resilient supply chains and use just-in-time models selectively. Being better prepared for the future depends on re-examining near and long-term strategies and acting on lessons learned from shortages that disrupted manufacturing worldwide.

Geopolitical Impacts

Geopolitical considerations are also impacting the semiconductor industry because some companies are building or planning to build their fabs to secure chip production capacity. Governments around the world are setting policies and programs to help solidify or establish their position in the global semiconductor supply chain. As a result, we should expect the global semiconductor ecosystem has to evolve as the flow of chips and accompanying hardware and software shift.

Competition in the Industry

Many tech giants such as Apple, Tesla, Google, and Amazon are now making their ASIC chips designed specifically for their products. This gives them more control over the integration of software and hardware while differentiating themselves from their competition. 

Battle of Chip Architechtures

The x86 architecture has dominated the microprocessor industry for over 50 years.  However, this is now changing with the growing popularity of Arm. While Arm’s architecture was born out of a need for low-power chips needed for vertical applications, they are starting to emerge not only as a low-power solution but also as a high-performance contender, rivaling the established x86 players. As a result, when hyperscalers such as Google and AWS decided to make their chips, they opted for the Arm architecture for its performance and low-power consumption that has become so critical for power-hungry data centers, consumer products, and sustainability efforts.