Covering Disruptive Technology Powering Business in The Digital Age

It is no coincidence that the accelerated pace at which technology has progressed over the decades has been directly proportional to the growth and evolution of the semiconductor industry. Devices are becoming more powerful than ever and yet they are also becoming smaller, more compact and require less energy.

Autonomous vehicles, millions of smart and connected IoT devices, ultra-fast information available at our fingertips seemingly coming out of thin air, machines that can think, make decisions and learn without human intervention – these all sound like they came straight out of a science-fiction novel but they are real technologies that are being developed or have already infiltrated our lives and how we do business.

At the same time, chips are also getting smaller. How small? This graph from Taiwan Semiconductor Manufacturing Company shows just how much progress we have made over the past three decades and how microscopically tiny semiconductors have become.

How small are a few nanometres?

Imagine something thinner than human hair and you’re barely past the 100-micrometre mark. When we speak about something lower than 10 nanometres, we’re talking about sizes of the human DNA and as we go smaller, molecules that are unseen by the naked eye.

These enable smaller and smaller processors, which bring with it several advantages, such as:

• More and smaller transistors can be packed into a tinier space.
• Manufacturers can produce more semiconductors and processors at a time.
• Electrons need to travel a shorter distance, saving time and energy, resulting in faster, more energy-efficient processors.

You could say that all of this has enabled the boom in technological innovation that we have seen over the years as semiconductors are now used in almost every aspect of our society, business and daily lives.

Challenges that May Damper Continued Innovation

As we enter the age of digital transformation, the cloud and AI, semiconductors will play an even bigger role to power our machines and devices and we can expect the continued growth of the semiconductor sector.

In fact, at the end of 2019, analyst firm Gartner forecasted that the global semiconductor market would grow by 12.5% this year. As the year went on, the forecast was revised to a decline of 0.9% in 2020, inflicted due to the far- and wide-ranging devastating impact of the COVID-19 pandemic. According to Andrew Norwood, Research Vice President at Gartner, “COVID-19 has distorted supply chain and manufacturing operations across the world and will lead to a drastic drop in consumer and enterprise spending across most areas with a few exceptions”.

Another significant event that has caused an impact on this progress has been the trade war, which has had adverse effects on not only the sale and progress of semiconductors but also the global GDP as well. On this, Norwood commented that the immediate impact of the U.S.-China trade war was to push several Chinese companies, including Huawei, into looking for alternative silicon suppliers – “with wholly-owned HiSilicon at the top of the list as well as alternative suppliers based in Japan, Taiwan, South Korea and China”.

The Rise of a New Semiconductor Powerhouse?

Indeed, we are now seeing this taking shape as we reach the end of 2020, as, after years of development, China’s Integrated Circuit (IC) industry has been making rapid strides. Last year, the industry generated over CNY750 billion and is expected to reach CNY900 billion this year, reaching a production capacity of over 20% of the world’s total.

According to Li Ke of the China Semiconductor Industry Association (CSIA), an integrated circuit industry is vital for developing modern industries. “It is therefore imperative for China to develop homegrown-core chips and a localised chip industry supply chain, not least to supply the country’s world-class telecom network equipment and handset manufacturers”, he added.

In China, a domestic chip manufacturing industry chain has emerged with the support of policies for industries in response to global events. In just a few short years, the nation has narrowed the gap with world-leading IC technologies, with continuous breakthroughs in IC manufacturing, research and development (R&D) as well as the industrialisation of major processes with the division of applications.

Li Ke believes that China will have the ability to fully mass-produce its own 28nm chips in one or two years, as well as a completely domestic industry chain and independent chip manufacturing capabilities.

Just last month, Chinese chip customisation solution provider, Innosilicon, announced that it had completed the testing of a prototype chip based on Semiconductor Manufacturing International Corporation (SMIC)’s FinFET N+1 process. N+1, SMIC’s new generation foundry node, is comparable to the 7nm process by the world’s largest dedicated independent semiconductor foundry, Taiwan Semiconductor Manufacturing Company (TSMC).

This N+1 fabrication technology will be SMIC’s next major node following developments the foundry has already made in the 14nm and 12nm semiconductor manufacturing processes. SMIC mentioned that when compared to its 14nm node, the N+1 technology improves performance by up to 20% and reduces power by 57% while potentially increasing transistor density by up to 2.7 times.

Onwards to 2021 and Beyond

The whole situation with China demonstrates that necessity is the mother of invention. The nation is currently the second-biggest consumer of foundry services after the USA, accounting for 22% of the global foundry sales in 2020, higher than APAC and even Europe. Faced with challenging sanctions, the Chinese chip industry has had to reinvent itself and innovate quickly in order to meet soaring demands and become self-reliant in chip production.

With upcoming trends such as edge computing, high-performance computing, artificial intelligence and 5G taking centre stage in shaping our future technology landscape, we can expect that the global demand for chips will increase exponentially in coming years.

SMIC’s N+1 is not positioned as a direct competitor to traditional 7nm chips. It is clearly targeted for low-power applications. However, what’s important to note is the pace at which these new advancements have been made. There are clear signs that they are scaling up and fast mastering the craft of chipmaking, backed by numerous policies and tax incentives introduced by the Chinese government to nurture growth. It won’t be long now before we will see major breakthroughs in IC technologies that will rival those in the West.

For global users, organisations and businesses, this should be taken as a positive. These breakthroughs will undoubtedly have a trickle effect to advance many areas of technology as well. As the famous saying goes, a rising tide lifts all boats. More competition will only breed more innovation in the IC and semiconductor manufacturing and development space, which will benefit all.

There is no single company or country can carry forward alone on this issue. By the end of 2021, we can only hope that there will be a greater balance where countries can have mutual trust and policies that will allow them to benefit from each other’s unique strengths to drive the next era of innovation.

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