Anybody here super knowledge about semiconducters??
Anybody here super knowledge about semiconducters? And willing to answer a few questions on trends they're seeing? Would really appreciate it
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Yeah, the semiconductor industry is very interesting. I break it up into two sub-categories. One is fabless (think Nvidia, AMD etc.), and the other is a foundry such as TSMC, Texas Instruments, etc.
Fabless is incredibly advantageous as companies can focus almost all of their additional cashflow to R&D to continue pushing innovation and performance boosts. They don't have any major capex costs such as massive semiconductor foundries which have incredibly high start-up/maintenance costs. There is a growing trend for companies going fabless, and we are seeing new entrants such as apple and tesla designing their own chip in-house and then outsourcing their production. This gives them the ability to tailor their chips to maximize the performance of their respective products. So, the fabless industry is seeing new-entrants and is becoming more competitive than ever. Although a bulk of the market share is still occupied by the big dogs (Nvidia, AMD, Intel), I would not be surprised to see firms such as apple, tesla, Microsoft to design their own chips.
Now, looking at this industry from the perspective of the foundry business aka companies that run/maintain semiconductor fabrication plants, their pure means of business is landing big contracts with mega-firms such as Microsoft, Samsung, Apple, AMD, Nvidia etc. The market share in this industry is mostly eaten up by TSMC, followed by Samsung, Global Foundries, and other smaller firms. The primary reason for TSMC's dominance is their ability to stay far ahead of the curve, from the perspective of manufacturing smaller and smaller chips. There is an inverse correlation between market share and chip size for TSMC, meaning the smaller the chip size, the higher the market share for TSMC is. They dominate the 10nm - 5nm market, for reference intel (a competitor) expects to start producing their own 7nm chips in 2023. So, I see TSMC continuing dominance in the foundry business and there is only a couple of threats from a macro perspective... China / US
Both countries acknowledge the strong and growing demand for chips, this is why they are both planning to grow chip production within their own country. In the US, we have seen a rejuvenation in Intel, following the announcement of their new CEO. They are doubling down on their business plan and building two new fabrication plants in the US.
Also, in case you don't know, the world is already in a global crisis in terms of meeting chip demand. During the first half of COVID, chip demand grew immensely due to personal electronics and now that we are back in "recovery" mode, there is a huge increase in automotive sales which is putting a lot of strain on the supply chain.
Hope this helps - this is just a short summary of the industry and I'm sure I missed a few points but hopefully, it provides some color.
Not OP but this is really helpful. Any good industry primers that you know of to learn more?
I learnt most of this by just following the industry and reading the news. I remember reading the Deloitte report a while back (see below), slightly outdated and doesn't take into consideration COVID implications but it is a great place to start.
https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/technology-…
This is awesome! Quick question for you, what kind of trends do you see around system on chip like what Apple does, does this mean we could see companies focusing in on semiconductor packaging more?
So companies like apple used to use chips from intel, then they realized that they can boost efficiency/performance by designing custom chips in-house and then outsourcing the manufacturing of the chip to a foundry (TSMC). This is definitely a trend we can see going forward with other companies however it will be interesting to see how the foundry business reacts. They definitely can't keep up with the demand and will have to start knit-picking contracts from their best customers which will probably lead to ruining certain relationships going forward.
Any specific questions?
trends related to system on chip? such as with M1 and Intel system on package
I'd say that the overarching trend right now is the end of Moore's Law. Basically, chip makers have to find a way to keep getting more efficient but without the doubling of transistors every 2 years. This is where Apple's M1 chip comes in (and SoC generally). Most CPUs are built to handle a wide range of tasks fairly quickly, while GPUs focus on graphics/video. Apple is blowing up this model, with a single chip that houses both a CPU and GPU (among other things) where they can work together. The chip will be much more specialized and get the efficiency gains without drastically increasing the # of transistors
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