Steve Clean The Semiconductor Ecosystem – Defined

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The final yr has seen a ton written in regards to the semiconductor business: chip shortages, the CHIPS Act, our dependence on Taiwan and TSMC, China, and many others.

However regardless of all this speak about chips and semiconductors, few perceive how the business is structured. I’ve discovered one of the simplest ways to know one thing difficult is to diagram it out, step-by-step. So right here’s a fast pictorial tutorial on how the business works.


The Semiconductor Ecosystem

We’re seeing the digital transformation of every part. Semiconductors – chips that course of digital data — are in virtually every part: computer systems, automobiles, house home equipment, medical tools, and many others. Semiconductor firms will promote $600 billion price of chips this yr.

Wanting on the determine beneath, the business appears fairly easy. Firms within the semiconductor ecosystem make chips (the triangle on the left) and promote them to firms and authorities companies (on the precise). These firms and authorities companies then design the chips into programs and gadgets (e.g. iPhones, PCs, airplanes, cloud computing, and many others.), and promote them to shoppers, companies, and governments. The income of merchandise that include chips is price tens of trillions of {dollars}.

But, given how giant it’s, the business stays a thriller to most.  In the event you do consider the semiconductor business in any respect, you could image employees in bunny fits in a fab clear room (the chip manufacturing unit) holding a 12” wafer. But it’s a enterprise that manipulates supplies an atom at a time and its factories value 10s of billions of {dollars} to construct.  (By the best way, that wafer has two trillion transistors on it.)

In the event you have been capable of look inside the straightforward triangle representing the semiconductor business, as an alternative of a single firm making chips, you’d discover an business with a whole lot of firms, all depending on one another. Taken as an entire it’s fairly overwhelming, so let’s describe one a part of the ecosystem at a time.  (Warning –  it is a simplified view of a really complicated business.)

Semiconductor Business Segments

The semiconductor business has seven several types of firms. Every of those distinct business segments feeds its sources up the worth chain to the subsequent till lastly a chip manufacturing unit (a “Fab”) has all of the designs, tools, and supplies essential to manufacture a chip. Taken from the underside up these semiconductor business segments are:

  1. Chip Mental Property (IP) Cores
  2. Digital Design Automation (EDA) Instruments
  3. Specialised Supplies
  4. Wafer Fab Tools (WFE)
  5. “Fabless” Chip Firms
  6. Built-in System Producers (IDMs)
  7. Chip Foundries

The next sections beneath present extra element about every of those seven semiconductor business segments.

Chip Mental Property (IP) Cores

  • The design of a chip could also be owned by a single firm, or…
  • Some firms license their chip designs – as software program constructing blocks, referred to as IP Cores – for large use
  • There are over 150 firms that promote chip IP Cores
  • For instance, Apple licenses IP Cores from ARM as a constructing block of their microprocessors of their iPhones and Computer systems

Digital Design Automation (EDA) Instruments

  • Engineers design chips (including their very own designs on prime of any IP cores they’ve purchased) utilizing specialised Digital Design Automation (EDA) software program
  • The business is dominated by three U.S. distributors – Cadence, Mentor (now a part of Siemens) and Synopsys
  • It takes a big engineering crew utilizing these EDA instruments 2-3 years to design a fancy logic chip like a microprocessor used inside a telephone, laptop or server. (See the determine of the design course of beneath.)

  • At the moment, as logic chips proceed to turn into extra complicated, all Digital Design Automation firms are starting to insert Synthetic Intelligence aids to automate and velocity up the method

Specialised Supplies and Chemical compounds

Up to now our chip continues to be in software program. However to show it into one thing tangible we’re going to should bodily produce it in a chip manufacturing unit referred to as a “fab.” The factories that make chips want to purchase specialised supplies and chemical substances:

  • Silicon wafers – and to make these they want crystal rising furnaces
  • Over 100 Gases are used – bulk gases (oxygen, nitrogen, carbon dioxide, hydrogen, argon, helium), and different unique/poisonous gases (fluorine, nitrogen trifluoride, arsine, phosphine, boron trifluoride, diborane, silane, and the record goes on…)
  • Fluids (photoresists, prime coats, CMP slurries)
  • Photomasks
  • Wafer dealing with tools, dicing
  • RF Turbines

Wafer Fab Tools (WFE) Make the Chips

  • These machines bodily manufacture the chips
  • 5 firms dominate the business – Utilized Supplies, KLA, LAM, Tokyo Electron and ASML
  • These are a number of the most intricate (and costly) machines on Earth. They take a slice of an ingot of silicon and manipulate its atoms on and beneath its floor
  • We’ll clarify how these machines are used a bit in a while

 “Fabless” Chip Firms

  • Programs firms (Apple, Qualcomm, Nvidia, Amazon, Fb, and many others.) that beforehand used off-the-shelf chips now design their very own chips.
  • They create chip designs (utilizing IP Cores and their very own designs) and ship the designs to “foundries” which have “fabs” that manufacture them
  • They could use the chips completely in their very own gadgets e.g. Apple, Google, Amazon ….
  • Or they might promote the chips to everybody e.g. AMD, Nvidia, Qualcomm, Broadcom…
  • They don’t personal Wafer Fab Tools or use specialised supplies or chemical substances
  • They do use Chip IP and Digital Design Software program to design the chips


Built-in System Producers (IDMs)

  • Built-in System Producers (IDMs) design, manufacture (in their very own fabs), and promote their very own chips
  • They’ve their very own “fabs” however may additionally use foundries
    • They use Chip IP and Digital Design Software program to design their chips
    • They purchase Wafer Fab Tools and use specialised supplies and chemical substances
  • The typical value of taping out a brand new modern chip (3nm) is now $500 million

 Chip Foundries

  • Foundries make chips for others of their “fabs”
  • They purchase and combine tools from a wide range of producers
    • Wafer Fab Tools and specialised supplies and chemical substances
  • They design distinctive processes utilizing this tools to make the chips
  • However they don’t design chips
  • TSMC in Taiwan is the chief in logic, Samsung is second
  • Different fabs specialise in making chips for analog, energy, rf, shows, safe navy, and many others.
  • It prices $20 billon to construct a brand new era chip (3nm) fabrication plant

Fabs

  • Fabs are brief for fabrication vegetation – the manufacturing unit that makes chips
  • Built-in System Producers (IDMs) and Foundries each have fabs. The one distinction is whether or not they make chips for others to make use of or promote or make them for themselves to promote.
  • Consider a Fab as analogous to a e-book printing plant (see determine beneath)
  1. Simply as an writer writes a e-book utilizing a phrase processor, an engineer designs a chip utilizing digital design automation instruments
  2. An writer contracts with a writer who specializes of their style after which sends the textual content to a printing plant. An engineer selects a fab acceptable for his or her sort of chip (reminiscence, logic, RF, analog)
  3. The printing plant buys paper and ink. A fab buys uncooked supplies; silicon, chemical substances, gases
  4. The printing plant buys printing equipment, presses, binders, trimmers. The fab buys wafer fab tools, etchers, deposition, lithography, testers, packaging
  5. The printing course of for a e-book makes use of offset lithography, filming, stripping, blueprints, plate making, binding and trimming. Chips are manufactured in a sophisticated course of manipulating atoms utilizing etchers, deposition, lithography. Consider it as an atomic stage offset printing. The wafers are then reduce up and the chips are packaged
  6. The plant seems hundreds of thousands of copies of the identical e-book. The plant seems hundreds of thousands of copies of the identical chip

Whereas this sounds easy, it’s not. Chips are in all probability probably the most difficult merchandise ever manufactured.  The diagram beneath is a simplified model of the 1000+ steps it takes to make a chip.

Fab Points

  • As chips have turn into denser (with trillions of transistors on a single wafer) the price of constructing fabs have skyrocketed – now >$10 billion for one chip manufacturing unit
  • One cause is that the price of the tools wanted to make the chips has skyrocketed
    • Only one superior lithography machine from ASML, a Dutch firm, prices $150 million
    • There are ~500+ machines in a fab (not all as costly as ASML)
    • The fab constructing is extremely complicated. The clear room the place the chips are made is simply the tip of the iceberg of a fancy set of plumbing feeding gases, energy, liquids all on the proper time and temperature into the wafer fab tools
  • The multi-billion-dollar value of staying at the vanguard has meant most firms have dropped out. In 2001 there have been 17 firms making probably the most superior chips.  At the moment there are solely two – Samsung in Korea and TSMC in Taiwan.
    • On condition that China believes Taiwan is a province of China this might be problematic for the West.

What’s Subsequent – Know-how

It’s getting a lot tougher to construct chips which are denser, quicker, and use much less energy, so what’s subsequent?

  • As a substitute of constructing a single processor do all of the work, logic chip designers have put a number of specialised processors within a chip
  • Reminiscence chips at the moment are made denser by stacking them 100+ layers excessive
  • As chips are getting extra complicated to design, which implies bigger design groups, and longer time to market, Digital Design Automation firms are embedding synthetic intelligence to automate components of the design course of
  • Wafer tools producers are designing new tools to assist fabs make chips with decrease energy, higher efficiency, optimum area-to-cost, and quicker time to market

What’s Subsequent – Enterprise

The enterprise mannequin of Built-in System Producers (IDMs) like Intel is quickly altering. Up to now there was an enormous aggressive benefit in being vertically built-in i.e. having your personal design instruments and fabs. At the moment, it’s a drawback.

  • Foundries have economies of scale and standardization. Relatively than having to invent all of it themselves, they will make the most of the whole stack of innovation within the ecosystem. And simply give attention to manufacturing
  • AMD has confirmed that it’s doable to shift from an IDM to a fabless foundry mannequin. Intel is attempting. They will use TSMC as a foundry for their very own chips in addition to arrange their very own foundry

What’s Subsequent – Geopolitics

Controlling superior chip manufacturing within the twenty first century might properly show to be like controlling the oil provide within the twentieth. The nation that controls this manufacturing can throttle the navy and financial energy of others.

  • Making certain a gradual provide of chips has turn into a nationwide precedence. (China’s largest import by $’s are semiconductors – bigger than oil)
  • At the moment, each the U.S. and China are quickly attempting to decouple their semiconductor ecosystems from one another; China is pouring $100+ billion of presidency incentives in constructing Chinese language fabs, whereas concurrently attempting to create indigenous provides of wafer fab tools and digital design automation software program
  • Over the previous few many years the U.S. moved most of its fabs to Asia. At the moment we’re incentivizing bringing fabs and chip manufacturing again to the U.S.

An business that beforehand was solely of curiosity to technologists is now one of many largest items in nice energy competitors.



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