TPT September 2024

INDUSTRY 360

Semiconductor strategies – rebuilding supply chains to secure computer chip availability

By Eric Lundin sales engineer and marketing manager, T&H Lemont Inc

Intel, founded by Moore, was packing 100 million transistors into each square millimetre of substrate. For better or for worse, ICs, commonly known as computer chips, are used in nearly everything, from the most advanced scientific and military equipment to relatively basic home appliances such as washing machines and clothes dryers. The industry is huge, with sales estimated to exceed $600bn annually. If it were a nation unto itself and the value of sales were equivalent to gross domestic product, the semiconductor industry would be the 25 th largest country in the world. Noteworthy is the structure of the industry. Companies involved in producing ICs come in three types. The so-called fabless companies undertake the design of the circuits only and do none of the fabrication. Others are integrated device manufacturers, or IDMs. These companies design and manufacture ICs, mainly for their own use. Some are pure-play entities, which do none of the design work, solely providing outsourced manufacturing for the fabless entities. Semiconductor supply chains Producing computer chips is no mean feat. Production takes place in a cleanroom, specifically one that complies with the requirements of ISO 14644-1 Class 5, which mandates a maximum of 3,520 airborne particles at 0.5µm or smaller per cubic meter of air. In the early 1970s, a semiconductor fabrication facility, commonly known as a fab, cost around $4mn, which is the equivalent of $31mn in 2024 dollars. The manufacturing capabilities have increased by an order of magnitude and, predictably, the cost of a fab has skyrocketed. A modern facility costs between $10bn and $20bn according to Intel. That’s just the construction. Pulling together the consumables that go into the chipmaking process is an arduous process, at best. The materials, and processes for those materials, can require as many as 70 border crossings. Needless to say, commissioning a chip manufacturing plant is not a project; it’s a series of projects, involving construction, equipment procurement and hair-raising logistics. The emergence of Covid-19 wrought no small amount of havoc on most industries. Governments throughout the world mandated widespread shutdowns and social isolation. Although many industries were deemed essential and continued operating, the fallout included severe disruptions in manufacturing and logistics. Many who were suddenly out of work spent more than a few dollars on entertainment hardware in the form of updated computers, gaming systems and various electronic gadgets, taxing the supply of computer chips.

“A modern smartphone is more powerful than the mainframe computer NASA used to put a man on the moon.” So goes the adage, anyway. This sentence was probably true, or close to the truth, when it was first uttered years ago, and of course smartphone technology has improved exponentially since the first one was manufactured. The active memory and storage capacity continue to grow, the sensors and camera technology are far better than those of just a few years ago, and the processing speed of phones these days is nothing short of dazzling. According to Samsung, today’s smartphones are almost 1,000 times faster than a 1980s Cray-2 Supercomputer. The key technology development took place in 1947 at the Bell Laboratories, Murray Hill, New Jersey. The breakthrough was the transistor, which can work as an amplifier or as a switch. Although the first transistor certainly had modest capabilities, the modern counterparts stretch the imagination. When used as an amplifier, a transistor’s output can be up to 1,000 times greater than the input. And because they have no moving parts, the fastest transistors can switch on and off more than 800bn times per second. A second development took place in 1958 when a circuit consisting of several components – transistors, resistors and capacitors – was built as a single unit, known as an integrated circuit or IC. In 1965, Gordon Moore predicted that the number of transistors that could be produced economically in a single IC would double every 18 months (later amended to doubling every two years). Slightly more than 50 years later

The semiconductor industry is expected to exceed $600bn in sales in 2024. The growth is so fast that it likely will approach $700bn in 2025 Source: Statista Inc

54

www.read-tpt.com

SEPTEMBER 2024