Tag: semiconductor chips

  • Qualcomm Strikes $2.4B Deal to Acquire Alphawave Semi in Major Chip Industry Move

    On June 9, Qualcomm Incorporated declared that it had reached a deal with Alphawave IP Group plc about the terms and conditions of a suggested acquisition of all of Alphawave Semi’s issued and to be issued ordinary share capital by Aqua Acquisition Sub LLC, an indirect wholly-owned subsidiary of Qualcomm Incorporated, at an implied enterprise value of roughly US$2.4 billion.

    Qualcomm’s growth into data centres is intended to be further accelerated and supported by the acquisition of Alphawave Semi. The rapid rise in AI inferencing and the shift to bespoke CPUs in data centres are driving the need for high-performance, low-power computing, which Qualcomm’s Oryon CPU and Hexagon NPU processors are well-positioned to satisfy.

    Acquisition to Complete in the First Quarter of 2026

    According to the announcement made in compliance with Rule 2.7 of the UK Takeover Code, this acquisition of Alphawave Semi is anticipated to be finalised in the first calendar quarter of 2026, provided that certain conditions are met or waived (where applicable).

    These conditions include, among other things, regulatory approvals, the consent of the required majority of Alphawave Semi’s shareholders, and UK High Court sanction.

    Impressive Product range of Alphawave Semi

    Providing intellectual property, custom silicon, connectivity devices, and chiplets that promote quicker, more dependable data transfer with improved performance and reduced power consumption, Alphawave Semi is a world pioneer in high-speed wired connectivity and computation technologies.

    Products from Alphawave Semi are a component of the core infrastructure that makes next-generation services possible in a variety of high-growth applications, such as data centres, artificial intelligence, networking, and storage.

    Under Tony’s direction, Alphawave Semi has created cutting-edge high-speed wired networking and computation technologies that complement our power-efficient CPU and NPU cores, according to Cristiano Amon, president and CEO of Qualcomm Incorporated.

    Workloads in data centres are a perfect fit for Qualcomm’s cutting-edge proprietary processors. Building cutting-edge technological solutions and enabling next-level linked computing performance across a variety of high-growth domains, including data centre infrastructure, is the shared objective of the merged teams.

    Tony Pialis, president and CEO of Alphawave Semi, provided more insight on the acquisition, stating that Qualcomm’s purchase of Alphawave Semi marks a noteworthy turning point for the company and a chance to collaborate with a reputable industry leader while adding value for its clients.

    The company will be in a strong position to increase our technological capabilities, access a wider consumer base, and broaden our product offerings by integrating Qualcomm’s resources and experience. Together, Qualcomm will spur innovation, open up new business prospects, and establish itself as a major force in AI compute and networking solutions.

  • Tata Electronics Eyes Malaysia Entry with Strategic Chip Fab Buyout

    Global semiconductor companies X-Fab, DNeX, and Globetronics are reportedly in negotiations with Tata Electronics to purchase a fabrication or outsourced semiconductor assembly and test (OSAT) facility in Malaysia.

    According to a media report, the deal will be spearheaded by KC Ang, the recently appointed president and head of Tata Semiconductor Manufacturing. For those who do not know, Tata Electronics’ semiconductor foundry is called Tata Semiconductor Manufacturing.

    According to the report, DNeX’s SilTerra facility and Globetronics are two of the top candidates to be purchased by Tata Electronics.

    Acquisition Aims to Further Strengthen Tata Group

    According to the article, the acquisition is intended to increase the Tata Group’s expertise and talent pool before it enters the Indian semiconductor assembly and packaging market. The Indian semiconductor industry is seeing significant investments from the Tata Group.

    With an investment of $11 billion, it is constructing India’s first semiconductor factory in Dholera, Gujarat. It is also spending $3 billion on a plant in Assam that will be used for semiconductor chip production and testing. OSAT activities will be the main emphasis of this initiative in Assam.

    Malaysia is emerging as a key site to become one of the world’s robust pillars in the global semiconductor chip supply chain in recent years. According to reports, 13% of the testing and packaging sector worldwide is based in the nation.

    Global chip manufacturer Intel has committed to investing $7 billion for its new plant in Penang, Malaysia, and the nation received an astounding $12.8 billion in foreign direct investments (FDI) in 2023.

    The Malaysian government last year announced the National Semiconductor Strategy, which will help the industry grow by enhancing the current infrastructure of OSAT facilities, luring more foreign direct investment, and opening doors for chip buyers like Apple and Lenovo to establish manufacturing facilities in the nation.

    Tata Electronics will be able to further acquire manufacturing-grade technology (MSGT) through the present acquisition, which is only available through well-established semiconductor companies.

    Tata Group Fostering Alliances in Semiconductor Space

    Tata Electronics has been forming partnerships with important semiconductor companies. To begin operations in Gujarat, the company inked a memorandum of understanding earlier this year with Powerchip Semiconductor Manufacturing Corporation (PSMC) and Himax Technologies, two Taiwanese semiconductor manufacturers, to produce display semiconductors.

    The collaboration intends to enhance its chip design and serve both parties’ clientele. In addition, the semiconductor behemoth collaborated with Tokyo Electron Limited (TEL) in 2024 to construct infrastructure for semiconductor equipment.

    However, the Indian government is also making investments to support the nation’s semiconductor sector. S. Krishnan, the secretary of the government of Electronics and IT (MeitY), stated in March that the government intends to launch the second India Semiconductor Mission (ISM) to assist the nation’s chip design infrastructure.

  • India’s Sixth Chip Unit: HCL-Foxconn JV Gets Cabinet Nod for Jewar Plant

    India’s sixth semiconductor plant, a INR 3,706 crore facility that would be established in Jewar, Uttar Pradesh, through a joint venture between HCL and Foxconn, was authorised by the Union Cabinet on 14 May.

    The facility will begin producing display driver chips for PCs, laptops, cars, and cell phones in 2027. The monthly production capacity of the factory is 20,000 wafers. The monthly production capacity of the design is 36 million pieces.

    There are now five semiconductor units at advanced phases of development. According to a national government statement, India advances in its efforts to grow the strategically important semiconductor sector with the establishment of this sixth facility.

    Semiconductor Industry Now Shaping Up in India

    The nation’s semiconductor sector is currently taking shape. Several states in the nation now have top-notch design facilities. The design businesses are being actively pursued by state governments.

    The central government also stated that this new unit will contribute to the Prime Minister’s vision of Atmanirbhar Bharat, given the growing demand for semiconductors due to the rapid growth of the manufacturing of laptops, mobile phones, servers, medical devices, power electronics, defence equipment, and consumer electronics in Bharat.

    HCL, however, has a lengthy history of creating and producing hardware. Foxconn is a significant global manufacturer of electronics.

    Alluring Sector for Entrepreneurs, Researchers and Students

    In order to create new goods, students and entrepreneurs from 70 businesses and 270 academic institutions are working on cutting-edge design technology. Twenty of the items created by these students have been recorded by SCL Mohali.

    The ecosystem partners have also set up shop in India as the nation advances in its semiconductor journey. Lam Research and Applied Materials are two of the biggest producers of equipment. Both are currently present in India.

    Many gas and chemical providers, like Linde, Inox, Air Liquide, and Merck, are preparing for the expansion of India’s semiconductor sector.

    Government data shows that the nation’s electronics manufacturing production has increased fivefold during the last ten years.

    The government is getting closer to its objective of raising value addition in electronics from the current 20% to over 35% by 2030 with the addition of this unit under the ISM. IT minister Ashwini Vaishnaw has mentioned about this goal numerous times.

    Foxconn is attempting to establish a semiconductor unit under the ISM for the second time. The Taiwan-based business partnered with Vedanta in 2023, but the two parties eventually parted ways.

    According to the minister, the Foxconn-HCL factory should satisfy Foxconn’s worldwide supply chain requirements and meet 40% of India’s domestic demand for display driver chips.

  • For ISRO, IIT Madras Designs Indigenous Shakti Semiconductor Chip

    The open-source RISC-V Instruction Set Architecture (ISA) serves as the foundation for this chip, which is a component of the Shakti family of microprocessors and represents a significant advancement in lowering India’s reliance on imported semiconductor technology. IIT Madras built and implemented the IRIS chip, which was first envisaged by ISRO’s Inertial Systems Unit (IISU) in Thiruvananthapuram.

    In India, every step of the development process—chip design, production, packaging, motherboard assembly, and software booting—was completed. This accomplishment demonstrates India’s capacity to establish a comprehensive semiconductor ecosystem. The goal of IIT Madras’ Shakti project, headed by Prof. V. Kamakoti, is to develop adaptable processors for a range of uses.

    What is IRIS Chip and its Usage?

    Fault-tolerant internal memories and specially designed modules like CORDIC and WATCHDOG Timers are features of the IRIS chip, which is designed for space applications. In addition to other essential tasks for space missions, it is made to satisfy the computational demands of ISRO’s command and control systems.

    Prof. V. Kamakoti, the director of IIT Madras, stressed the value of employing domestic microprocessors for strategic initiatives and national security. “Any computing system’s brain is the CPU. Instead of doing what you don’t want it to, it should do what you want it to,” he said. Greater flexibility and cost-effectiveness are made possible by the Shakti processor’s open-source nature, which also lowers the cost of replacing parts and permits the use of outdated interfaces.

    ISRO Appreciating the Discovery

    The microprocessor design and stress tests have been deemed satisfactory by ISRO experts, who will now move forward with their own testing. In addition to enhancing India’s space capabilities, this partnership between IIT Madras and Isro shows off the nation’s developing semiconductor technological skills and opens the door for more domestic space exploration advancements in the future. The creation of water-free concrete that might be utilised to build buildings on the Moon and Mars was previously disclosed by IIT Madras.

    About ISRO

    The Government of India’s space agency, the Indian Space Research Organisation (ISRO), has its main office in Bangalore. Its goal is to “harness space technology for national development while pursuing space science research and planetary exploration.” The Indian National Committee for Space Research (INCOSPAR), which was founded in 1962 by Jawaharlal Nehru, the country’s first independent prime minister, and his close scientist and assistant Vikram Sarabhai, was replaced by ISRO in 1969.

    Thus, the creation of ISRO formalised India’s space endeavours. The Department of Space oversees it and answers to the Indian Prime Minister. Aryabhata, the first satellite created by ISRO for India, was launched by the Soviet Union on April 19, 1975. It bears the name of Aryabhata, the mathematician.

    The SLV-3, an Indian-made launch vehicle, launched Rohini into orbit in 1980, making it the first satellite to do so. Later, ISRO created two further rockets: the Geosynchronous Satellite Launch Vehicle (GSLV) to place satellites in geostationary orbits and the Polar Satellite Launch Vehicle (PSLV) to launch satellites into polar orbits.

    Numerous Earth observation and telecommunication satellites have been launched using these rockets. There has been the deployment of satellite navigation systems such as GAGAN and IRNSS. ISRO launched the GSAT-14 using a domestic cryogenic engine in January 2014.


    Indian Railways Partners with IIT-Madras for Air Mobility Solutions
    Indian Railways partners with IIT-Madras to develop advanced air mobility solutions, aiming to revolutionize transportation with cutting-edge innovations.


  • ‘Made-in-India’ Chip to be Introduced by Sep/Oct: Vaishnaw

    By September or October of this year, Ashwini Vaishnaw, the minister of information technology, anticipates that the first “made-in-India” chip will be released from a commercial factory. The minister made the remarks during a media appearance in Bengaluru on February 15, according to various media reports. Notably, Tata Electronics is constructing a semiconductor facility in Dholera, Gujarat, in partnership with Powerchip Semiconductor Manufacturing Corporation (PSMC).

    Nearly 60% of the building has already been finished at Micron’s semiconductor assembly and testing facility in Sanand, the state. According to Vaishnaw, the Indian Institute of Science (IISc), Bengaluru, has received grants of INR 334 Cr from the Centre “for new research and development (R&D) in gallium nitride, a technology in semiconductors, which is used in telecom and power.” Students at 234 institutions are receiving the “latest” semiconductor design tools, he added. Without going into detail, the minister also stated that the union government intends to launch a production-linked incentive (PLI) program for “components” shortly.

    India’s Manufacturing Sector Attracting Investors

    The nation has seen investments in the electronics manufacturing sector totalling INR 13,162 Cr in the “recent past,” according to the IT minister, and many more are on the horizon. In response to a query from the media, Vaishnaw stated that the IT ministry is collaborating with industry participants to finish the initial version of the India Semiconductor Mission (ISM 1.0). The Centre intends to finish modernising the semiconductor lab in Mohali under the first edition.

    Upon this, he stated that the ministry will start the process of sanctioning ISM 2.0 and that funding for the second iteration of the mission would be determined upon Cabinet approval. This occurs when the union government is making every effort to turn India into a semiconductor hub by providing incentives and sops to international companies looking to establish operations there.

    Semicom India Programme

    To encourage silicon semiconductor fabs, display fabs, compound semiconductors, and other industries, the Centre started the Semicon India program in 2021 with an investment of INR 76,000 Cr. Establishing greenfield semiconductor and display factories, enhancing R&D and design skills, and being able to compete with other Asian bases to lessen India’s reliance on imports are some of the program’s main goals. The objective of the program is to entice major international chip manufacturers to establish India as their production base.

    India aspires to become a technology leader in these strategically important fields, which are also essential for safeguarding the nation’s vital information infrastructure. The objectives also support the government’s Atmanirbhar Bharat vision. ISM was also launched in 2022 as part of the Semicon India program. Investors are also following suit; domestic semiconductor firms raised $28 million in 2024 from just $5 million in 2023. The domestic semiconductor market is at the centre of all of this, and according to various published reports, it is expected to expand into a $150 billion potential by 2030.


    India Must Be at the Forefront of AI Revolution: Sam Altman
    OpenAI CEO Sam Altman emphasizes India’s role in the AI revolution, urging the nation to take a leadership position in artificial intelligence development.


  • Intel or AMD: The Better Processor

    Both are American multinational technology companies manufacturing semiconductor chips. Both were founded around the same time. Both have global business operations and both are avid competitors on the world stage.

    One is named Intel Corporation and the other is Advanced Micro Devices, Inc., commonly known as AMD. Producing semiconductor chips that develop computer processors and related technologies, both these companies compete within the same market space vying for the same customers. Here’s a brief history of these companies and a look at their business operations to determine who is better with their products.

    Origins & Expansions
    The Better Brand

    Origins & Expansions

    Intel Corporation

    It was the year 1968 when Gordon E. Moore, a chemist, and Robert Noyce, a physicist and a co-inventor of the integrated circuit, founded Intel in Mountain View, California. A venture capitalist and investor, Arthur Rock extended help by finding investors and Max Palevsky was on the board from the early days.

    Intel was distinguished from the very beginning by its ability to make logic circuits using semiconductor devices. The main aim of the founders of the company was the semiconductor memory market, which was then, widely predicted to replace magnetic-core memory. Working towards this, the company experimented with various products, finally producing the first commercial metal-oxide-semiconductor field-effect transistor silicon gate SRAM chip, the 256-bit 101. The company created its first commercially available microprocessor in the year 1971 and the first microcomputers in the year 1973. Intel also opened its first international manufacturing unit in the year 1972 in Malaysia followed by opening assembly facilities and semiconductor plants in Singapore and Jerusalem in the early 1980s. In the early 1990s, it opened manufacturing and development centers in China, India, and Costa Rica.

    The growing success of IBM personal computers that was based on the intel microprocessor prompted the company to shift focus to the microprocessor business which proved to be a huge factor in the company’s continuing success. However, challenges and obstacles greeted Intel at the turn of the century. AMD emerged as a strong competitor to Intel, challenging its dominant market position. Over the years, through various other products and refocusing on its core business, Intel has tried to regain its previous market leader position. AMD has succeeded in challenging Intel by providing stiff market competition.


    Intel | American multinational corportaion | Company Profile |
    Founded by Gordon Moore and Robert Noyce, Intel created world’s first commercial microprocessor chip. Know more about it’s business model, success story etc


    Advanced Micro Devices, Inc. (AMD)

    AMD was incorporated in the year 1969 by Jerry Sanders, an electrical engineer, and a group of other technology professionals. The company initiated its business operations by becoming a second source supplier of microchips that were designed by Fairchild Semiconductor and National Semiconductor and focused on producing logic chips. AMD entered the RAM chip market in 1971 and following its success went public in 1972. It also entered the microprocessor market in 1975 with a product that was almost an exact copy of the Intel microprocessor. By that year, AMD was producing a total of 212 products – 49 of which were proprietary.

    A business agreement with IBM by Intel, led Intel and AMD to enter into a 10-year technology exchange agreement in 1981, stating that either company could become a second source manufacturer of semiconductor products developed by the other. Then in the year 1991, it introduced its AMD-designed chip and began to compete directly with Intel.

    AMD survived the dot-com bubble and has traveled a winding road, facing many challenges and obstacles, and emerged successful. In the year 2021, it announced a partnership with Meta to make the chips used in the Metaverse. The year 2022 saw AMD enter into a partnership with Samsung to develop a mobile processor to be used in future products.


    AMD: Pioneering the Future of High-Performance Computing
    AMD is a semiconductor company that specializes in high-performance computing, graphics, and visualization for consumers and businesses, with 50+ years of innovation.


    The Better Brand

    Over the years, AMD has emerged as a major player in the processor market and the big war is between Intel and AMD. In a consumer-centric market, tough competition means a broader choice for the customers. What this essentially comes down to is a comparison between the two products and their performance on various fronts.

    CPU Performance

    Intel and AMD CPU Performance
    Intel and AMD CPU Performance

    The 13th-gen line of CPUs from Intel offers the best value for money which is a strong pull for consumers. However, AMD’s latest Zen-based processor is the most powerful consumer-grade chip, even if it is a little expensive. AMD’s chip is most valuable for users using advanced 3D rendering software. The more affordable from AMD’s offering is the AMD Ryzen 77700X, although, its performance in comparison with Intel Core i7-12700K is not up to the mark. Intel is currently set to dominate the mid-market with the release of its Intel Core i7-13700K.

    The Number’s Game

    Both companies were founded by ex-employees of Fairchild Semiconductor. However, Intel began stronger and successfully bagged IBM as a client for supplying microprocessors for their first personal computers. After that, it cemented its position as a market leader through various innovative products and became a multi-billion-dollar conglomerate and an undisputed market leader. Intel also has a much stronger revenue stream and higher R&D budgets.

    AMD, on the other hand, did begin strong and began competing with Intel but faced numerous challenges and obstacles through the years. By 2010, the company had fallen far behind Intel and had to go back to the drawing board with renewed focus. This move proved a turning point for them and their new Zen architecture has given Intel a run for their money.

    Intel vs AMD: Strengths & Weaknesses Of Each Platform

    Cost

    In the earlier days, AMD’s products were much lower priced than that of Intel, although, the difference is negligible these days. However, the cost of a technology product goes much deeper than the money count. AMD’s CPUs, although costlier, offer cross-generational compatibility that integrates seamlessly with the latest hardware. Intel products have not always been so adaptable, which results in a higher expense, eventually. Also, AMD offers more energy-efficient products than Intel.

    Laptop Performance

    AMD has begun challenging the laptop CPU market, which was, until now, Intel dominated. Both these companies offer great laptop CPUs. It rather depends on the user which CPU would suit best, based on the kind of use of the laptop.

    Conclusion

    While both companies are neck-to-neck with their product offerings, both Intel and AMD CPUs have differing uses. Intel makes the best CPUs for the average everyday user. However, users with high-end workstations would benefit better from AMD CPUs. While scouting for CPUs, users should keep in mind their usage for deciding the best product.

    FAQs

    When was Intel founded?

    Gordon E. Moore and Robert Noyce founded Intel in 1968.

    When was AMD founded?

    AMD was incorporated in the year 1969 by Jerry Sanders and a group of other technology professionals.

    When did Intel create its first microprocessor?

    Intel created its first commercially available microprocessor in the year 1971 and the first microcomputer in the year 1973.

  • Why Semiconductor Production is Hard and Only a Few Companies Produce it?

    You all know that semiconductor chips are used in nearly every electronic device that we buy. They go into computers, smartphones, gadgets, cars, aircraft, medical equipment, military systems and whatnot. The world is facing a global semiconductor chips shortage at present which has raised the question of why can’t more companies get into the production of semiconductor chips. Let’s dive into the semiconductor industry through this article to know what are the complexities which don’t allow many companies to enter the industry.

    Why are semiconductor chips in the news?

    In 2021, the global chip shortage was much in the news and companies like Apple, Tesla, Tata Motors and Samsung Electronics had to starve for semiconductor chips. A total of 169 industries were impacted by the shortage, the auto industry being the worst hit.

    There were several factors which led to such a global shortage. Some of them are:

    • The surge in demand for electronics required for work from home during the pandemic
    • Labour shortage due to lockdown restrictions
    • Drought in Taiwan
    • The Trade war between the U.S. and China.

    Semiconductor chip storage has made countries realise that the manufacturing of chips is concentrated in a few east Asian countries only. So, this year countries around the world are coming up with plans to build production capacity for these semiconductor chips so as to become self-sufficient and reduce import dependency. India is going to spend around $30 billion to develop the semiconductor supply chain ecosystem. The U.S. is also considering implementing the CHIPS for America Act to provide $52 billion for chip manufacturing and government support to semiconductor giants. The Act aims to provide financial assistance for the construction, expansion, or modernization of a semiconductor fabrication plant in the United States.

    Semiconductor Chips Industry- The History & The Present

    Jack Kilby - Inventor of Semiconductor Chips
    Jack Kilby – Inventor of Semiconductor Chips

    In 1958, Jack Kilby, an electronic engineer at Texas Instruments, created the first integrated circuit which is the ancestor of modern-day microchips. It was a great and revolutionary invention of the 20th century. The semiconductor industry started around 1960 and sales revenue crossed the $ 1 Billion mark by 1966. In 2022, the global semiconductor chip industry is expected to reach about US$600 billion. But very few companies in the world can make semiconductor chips, and even fewer can make them profitably at that. Let’s understand why it is so by delving into the semiconductor chips industry and its manufacturing process.

    The Model and the Major Players of the Semiconductor Industry

    Countries dominating semiconductor production.
    Countries dominating semiconductor production.

    The semiconductor industry is dominated by companies from Taiwan, the U.S, South Korea, China, Japan and the Netherlands where semiconductor manufacturing has government backing, developed infrastructure and economies of scale.

    The industry is based on a model that fabrication, design and development is distributed among different companies and their subsidiaries around the world. Foundry companies like TSMC and GlobalFoundries are involved in manufacturing only. Fabless semiconductor companies like AMD, Nvidia outsource production to a third-party fabrication plant and only design the device. Integrated Device Manufacturers (IDMs) such as Intel and Samsung manufacture (in-house), design and as well as sell integrated circuit products.

    Major players in the industry are TSMC (Foundry), Samsung Electronics (IDM), Intel (IDM), and Qualcomm (Fabless).

    Table representing top 8 semiconductor companies, their type and country.

    Name of the Company Country Type
    Intel United States IDM
    Samsung South Korea IDM
    TSMC Taiwan Foundry
    SK Hynix South Korea IDM
    Micron United States IDM
    Qualcomm United States Fabless
    Nvidia United States Fabless
    Infineon Germany IDM

    Taiwan’s TSMC alone manufactures a great percentage i.e. more than 50% of semiconductors in the world. It is the world’s largest foundry. Apple, which is the biggest consumer of chips and the two major fabless semiconductor companies, Nvidia and Qualcomm, are the clients of TSMC only. Samsung, the rival company of TSMC, has announced to invest $355 billion to manufacture 3nm chips to beat TSMC.

    The process of manufacturing Semiconductor Chips

    Semiconductor chips are made using a semiconductor, silicon. The process of making semiconductor chips involves more than 59 types of equipment and different steps which are required to be repeated to create layers in a chip. A chip  can consist of as many as 100 layers which means that the steps have to be repeated in the same number.

    The wafers of silicon extracted from sand are transformed into transistors that form the base of a group of circuits called chips. The following steps outline the process of creating a layer in a semiconductor chip-

    • The first step is to coat the wafers with photosensitive chemicals and light resistant materials.
    • Then there’s lithography performed at the second stage where coated silicon wafers are exposed to UV light inside a lithography machine. The light is passed through a mask containing the chip’s blueprint onto the wafer to print the pattern.  This process makes it possible to build hundreds of chips on a single silicon wafer.
    • The area exposed to light then gets hardened and the unexposed soft areas are etched away by hot gasses.
    • The next step involves the use of ionic gasses to modify the conductive properties of the layer created by adding some impurities and then finally the metal links are laid down between transistors, thereby creating one complete layer.

    All of these steps are to be repeated to create subsequent layers.

    Why can’t we just produce more chips to meet the soaring demand?

    If there’s a chip shortage then why don’t more companies get into semiconductor chip production and reduce this gap between demand and supply? Well, to know the answer to this question we need to first understand the complexities of making chips and the semiconductor industry.

    What makes manufacturing semiconductor chips so complicated?

    Though the chip is a tiny thing in terms of size, it involves the most complicated and expensive processes. Here’s the list of factors which makes it difficult for any company to enter this industry-

    • It requires land, permits, natural infrastructure, electricity, complicated machines and a lead time of more than 2 years to set up the mega-expensive fabrication plants and factories that build these chips. In 2021, Samsung announced plans for a 17 billion dollar chip plant in Texas to be opened in 2024.
    • Manufacturing a chip is also a complex procedure which takes a considerable amount of time. It takes almost 3 months to turn the raw silicon into that final chip which is put into devices.
    • The manufacturing process is atomic level and requires expensive factory equipment.
    • Also, the rooms where silicon is put into chip-making machines are required to be absolutely dust-free. A single speck of dust can waste all efforts and millions of dollars.
    • Semiconductor chip production involves a complex network of companies that produce or design them, along with those that supply the technology, materials and machinery required.

    How did the Russia-Ukraine war impact the Industry even more?

    Participation of Russia and Ukraine in the global supply of Palladium and Neon respectively.
    Participation of Russia and Ukraine in the global supply of Palladium and Neon respectively. 

    Neon is required for lasers used in lithography for producing chips. Last year, the global consumption of neon for chip manufacturing was around 540 metric tonnes. The Russia-Ukraine war has worsened the global chip shortage because more than half of the world’s neon is produced by two Ukrainian companies only- Ignas and Cryin who had to shutter their operations. So, this will have an intense impact on the semiconductor industry. Moreover, Russia’s palladium supply can also be affected due to the war. The shortage of palladium which is essential for catalytic converters applied in exhaust systems of automobiles can indirectly have a potential impact on the semiconductor industry by way of less demand of chips by automakers.

    Conclusion

    Semiconductor foundries need a huge capital investment of billions of dollars and a considerable period of time to set up. Moreover, these foundries cannot produce chips at a very fast pace because the manufacturing process also takes time and requires expensive equipment. All this makes it difficult for any company to get into the industry and even if any company does so, it becomes difficult for them to compete with the big fish and make profits. That’s why when it comes to semiconductor chip manufacturers, we get to hear only a few names who have acquired a huge market share in the industry over time.

    FAQs

    What are semiconductor chips made of?

    Semiconductors also referred to as integrated circuits (ICs) or microchips, are made from pure silicon.

    Who is the largest manufacturer of semiconductor chips?

    Taiwan’s TSMC is the largest manufacturer of semiconductor chips.

    What are the best 5 semiconductor companies to invest in?

    Taiwan Semiconductor Manufacturing Co Ltd (TSMC), Intel Corp (INTC),  Nvidia (NVDA), Advanced Micro Devices Inc (AMD), Micron (MU).