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Lightning-fast innovation: How semiconductors drive the revolution in electronics
The semiconductor industry is a collective term for companies that design and manufacture semiconductors and their devices, including transistors and integrated circuits. Its roots can be traced back to 1948, when Shockley, Brattain and Bardeen at the Berkeley Laboratory invented the transistor. Many companies quickly emerged, including Motorola (1952), Shockley Semiconductor (1955), and Texas Instruments, to begin manufacturing transistors.
In 1958, Kilby of Texas Instruments and Noyce of Fairchild independently invented the integrated circuit, a revolutionary technology that allowed multiple transistors to be manufactured on a "wafer" of semiconductor material. This led to the rapid pace of manufacturing technology advancement that we now know as Moore’s Law.
The sales amount of electronic products has increased significantly. According to the data in 2018, the annual sales revenue of the semiconductor industry has exceeded 481 billion US dollars. In 2019, 32.4% of the entire semiconductor market was used in network and communication equipment, showing its importance in the electronics industry.
As the year progresses, semiconductor sales reached a record high of $555.9 billion in 2021 and are expected to grow to $726.73 billion by 2027. These data fully demonstrate the role of semiconductors in driving innovation in electronic products.
Industry Structure
The global semiconductor industry is dominated by companies from the United States, Taiwan, South Korea, Japan and the Netherlands, with Israel and Germany also having significant influence in the field. The industry is characterized by continuous growth but high volatility with cyclical fluctuations. The current average annual growth rate over the past 20 years is about 13%, but at the same time it is also facing great market fluctuations.
This requires the industry to have extremely high flexibility and innovation capabilities in order to constantly adapt to rapid changes in the market.
The semiconductor industry's operating model has changed significantly over the past few decades. Before the 1980s, most semiconductor companies were vertically integrated, designing and manufacturing chips. Over time, most of these functions were outsourced, resulting in today’s model of reliance on complex supply chains. Today, fabless semiconductor companies led by TSMC and UMC focus on chip design and rely on other companies for manufacturing, and they have gradually dominated the market.
Market Share and Sales
As of 2021, only three companies are capable of manufacturing the most advanced semiconductors: TSMC, Samsung, and Intel. This is because the capital cost of building a semiconductor factory is very high. For example, TSMC’s newest factory cost $19.5 billion and is capable of manufacturing 3-nanometer semiconductors. As the industry develops, many companies are considering outsourcing production. For example, Intel is currently considering outsourcing part of its production to TSMC.
These changes have had a profound impact on the entire electronics market, making many technological advances dependent on the rapid innovation and evolution of semiconductors.
Across the industry, represented by Texas Instruments, Motorola and Qualcomm, both among pure-play foundries and integrated device manufacturers (IDMs), semiconductor demand is the driving force behind growth in the e-commerce and consumer electronics markets. Important factors. According to forecasts, annual sales of consumer electronics are expected to reach $2.9 trillion by 2020, and technology industry sales are expected to reach $5 trillion by 2019.
From various reports and data, with the strong growth of semiconductors, the entire electronics market is undergoing a revolution. As a technology enabler, semiconductors have not only changed our lifestyle, but also reshaped the global economy.
It makes us wonder how future electronic technology, driven by semiconductors, will continue to transform our daily lives and industrial ecology?
