Semiconductors are part of microchips or integrated circuits (ICs), also called semiconductor chips. They power phones, medical equipment, space exploration, robots, computers, influence warfare and economy.
About Semiconductors
Semiconductors conduct electricity better than insulators, like rubber, but not as well as conductors, like copper. This makes them useful in electronic switches and amplifiers, controlling and manipulating electrical signals.
Semiconductor control is the basis for all digital logic. While silicon is most commonly used, other materials like germanium and gallium arsenide control electrical current.
This facilitates creation of diodes, transistors and integrated circuits. The silicon microchips in smartphones operate by managing electric signals. Without these materials, the digital world as it's known wouldn't exist.
Purpose of Semiconductors
Semiconductors operate in many applications from computers to electric vehicles. They enable data processing, information storage, and communication between devices,
Processing Information: Perform calculations, run software, and make decisions in computers, smartphones, and other devices.
Controlling Devices: They regulate operation of appliances, vehicles, and industrial machinery.
Amplifying Signals: Boost weak signals in communication systems, medical equipment and audio devices.
Storing Data: They form the basis of memory chips in computers, smartphones, and storage devices.
Warfare: semiconductors are integral to modern warfare. They power communication systems, precision-guided munitions, advanced surveillance, autonomous vehicles and cyber warfare. China supplies most of Russia's microchips for use in vehicles, systems and war equipment.
Semiconductors in the Global Economy
The semiconductor industry is integral to the global economy. It drives innovation and growth across countless sectors.
Economic Value: The market for semiconductors is enormous, driving significant revenue for manufacturers and supporting related industries.
Job Creation: The industry employs millions of people worldwide, from researchers and engineers to manufacturing workers and technicians.
Future of Work: While tasks could be automated by AI or robot use resulting in job losses but the industry is expected to continue growing with technological advancement thus leading to job creation.
The semiconductor industry has a global market value of over $500 billion. The market shows continued growth driven by rising demand for electronics, automotive technology, and advances in artificial intelligence.
The automotive semiconductor market alone is expected to exceed $60 billion by 2026. Semiconductors step into new areas, such as renewable energy systems and the Internet of Things (IoT).
The Internet of Things is a network of physical objects, or "things." They're embedded with sensors, software, and connectivity allowing them to collect and exchange data over the internet.
Semiconductors are increasingly needed in artificial intelligence (AI) and machine learning applications. The global AI hardware market is projected to grow significantly.
With a value of USD 25.45 billion in 2024, just below previous estimates, AI hardware is expected to reach USD 210.5 billion by 2034. It's projected to expand at a CAGR (Compound Annual Growth Rate) of 22.43% from 2025 to 2034.
The global semiconductor market itself is a dynamic industry, with sales reaching a record $555.9 billion in 2021. It's expected to reach over $1 trillion by 2030.
Significant growth is driven by increasing demand in sectors like smartphones, data centers, and automotive. It's expected to expand at a CAGR of 11.2% from 2024 to 2034.
After silicon, gallium arsenide is the second-most common semiconductor. It's used in laser diodes, solar cells, microwave-frequency integrated circuits, and others and is projected reach $1.39 billion by 2032.
Semiconductor Manufacturing
Semiconductors and microchips are manufactured in specialized factories called fabs or fabrication plants. The facilities need super clean environments and advanced technology.
The plant employs a wide range of professionals. They include engineers, technicians, researchers and support staff.
In the manufacture of electronic semiconductors, fab workers have many tasks. They load semiconductor material into the furnace, locate crystal axis in ingots using x-ray equipment, saw formed ingots into segments, load individual segments into crystal growing chambers and monitor controls.
Creation is a complex and precise process involving several stages. It starts with highly purified materials, primarily silicon.
Raw Material Sourcing: Silicon is sourced from sand.
Wafer Fabrication: Silicon is melted and grown into large, cylindrical ingots. The ingots are sliced into thin, circular wafers. Processes like photolithography, doping, and etching create intricate patterns on the wafers.
Photolithography: The wafer is coated with a light-sensitive material (photoresist). A pattern, representing the circuit design, is projected onto the wafer using ultraviolet light. The exposed photoresist is then etched away.
Etching: Chemical etching removes unwanted material, leaving the desired circuit pattern on the silicon wafer.
Doping: Impurities are introduced into specific areas of the silicon to alter its electrical conductivity, creating transistors and other components.
Metallization: Metal layers are deposited to create electrical connections between different components.
Testing and Packaging: Each is tested for functionality. Working units are cut from the wafer, packaged to protect them and provide electrical connections to the outside world. Each wafer can produce hundreds to thousands of chips.
Technologies like extreme ultraviolet (EUV) lithography revolutionize chip production, enabling creation of smaller, more efficient units. Thus the number of transistors on a chip continues to increase for better performance and power efficiency.
The entire process requires top of the line equipment, cleanroom environments, and highly skilled engineers and technicians.
Environmental Impact
The manufacturing process of semiconductors is energy-intensive and involves use of hazardous chemicals. Problems include:
High Energy Consumption: Powering the highly specialized equipment and cleanrooms requires a lot of energy, contributing to carbon emissions.
Water Usage: The etching and cleaning processes need large quantities of purified water.
Waste Generation: Chemicals and byproducts from manufacturing have to be properly disposed of to prevent environmental contamination.
The industry is increasingly focusing on sustainable practices. These include reducing water consumption, recycling materials, and investing in renewable energy sources.
Facts About Semiconductors
The Transistor: Invention of the transistor in 1947 at Bell Labs revolutionizes electronics, enabling integrated circuits and the rise of the digital age.
Moore's Law: Gordon Moore, co-founder of Intel, finds the number of transistors on a microchip doubles about every two years, with exponential increases in computing power. While rate of increase has slowed, Moore's Law is a driving force in technological advancement.
Beyond Silicon: Research is underway to develop semiconductors using alternative materials. Graphene, germanium, gallium arsenide and gallium nitride improve performance and efficiency.
Graphene consists of a single layer of carbon atoms in a honeycomb lattice. It's been used to create functional semiconductors. Graphene contributes to faster and more efficient electronics like quantum devices.
Semiconductors are important to solar panel functions, converting sunlight into usable electricity. This contributes to renewable energy efforts.
Where Semiconductors are Produced
Taiwan: Home to TSMC (Taiwan Semiconductor Manufacturing Company), the world's largest contract chip manufacturer.
South Korea: Samsung and SK Hynix are major players in memory chip production.
United States: Intel and Micron are significant manufacturers, although the US has traditionally focused on chip design.
China: Rapidly growing its semiconductor manufacturing capabilities with significant government investment.
TSMC's influence shows the strategic importance of semiconductor manufacturing in maintaining the global supply chain, in ongoing and recent geopolitical climate changes.
The TSMC Controversy: A $100 Billion Investment in the US
TSMC's dominance in semiconductor manufacturing has made it a strategically important company. Recently, news emerged that TSMC is investing over $100 billion in US based factories.
This investment causes economic fear in Taiwan as this takes TSMC away from Taiwan where most of their foundries are located. Many consider the payment insurance or a bribe for protection in case of a China/Taiwan war.
The chipmaker's commitment to invest follows the US president's threat to impose tariffs on chips from Taiwan. He often accuses the company of taking away the U.S. industry.
Both Taiwan's government and TSMC have stated the maker's decision is not influenced by Washington's pressure. Many claim it's simply an effort to boost production of everyday chips for its largest customer (who, like China, has nuclear weapons).
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