The Important Role of Semiconductor Foundries in Making Microchips

Key takeaways:

• Semiconductor foundries
• Applications of semiconductor foundries
• Recent trends in semiconductor foundries
• Recent advancements in the semiconductor foundry industry

A semiconductor foundry, primarily called a "foundry," is a specialized facility dedicated to manufacturing microchips or integrated circuits (ICs).  In contrast to integrated device manufacturers (IDMs) that manage both chip production and design, foundries concentrate exclusively on the manufacturing process. They provide a vital service to companies and designers lacking the required resources or infrastructure for semiconductor production.

Semiconductor foundries function as essential collaborators in the semiconductor ecosystem, driving technological advancement through improvements in node size and facilitating a diverse range of applications that influence nearly every aspect of modern life.

Among all the foundries produced worldwide, Chinese foundries are gaining popularity due to their advanced casting technology, skilled professionals, and stable supply chain. Due to this, China is anticipated to dominate the semiconductor foundry industry with an 11.1% CAGR by 2032.

How are semiconductor foundries applicable across different domains?

The semiconductor foundry has applications in diverse sectors such as communication, PCs/Desktops, consumer electronics, automotive, industrial, defense & aerospace, and other domains.

In the communication sector, semiconductor foundries play a crucial role in producing components for telecommunication infrastructure and mobile devices. PCs or Desktops depend on semiconductor foundries for the manufacturing of central processing units and other essential components. Similarly, consumer electronics such as smartphones, tablets, and wearables also rely on semiconductor foundries for their production. Hence, the consumer electronics segment is estimated to gain an absolute revenue growth of $45.8 billion from 2022 to 2032.

The automotive industry utilizes foundry services for producing components used in advanced driver-assistance systems and electric vehicles. In industrial sectors, semiconductor foundries are employed for manufacturing control systems and sensors. The defense & aerospace sectors rely on foundries to produce secure communication systems and aerospace components. Moreover, semiconductor foundries have applications in other domains, catering to a variety of industries such as healthcare, energy, and IoT devices.

Which trends are shaping the future of the semiconductor foundry industry?

Use of advanced analytics:

An emerging trend in semiconductor foundries involves the growing utilization of advanced analytics, particularly for harnessing big data. These foundries incorporate sensors and data-collecting devices into their tools, facilitating the extraction of valuable data for enhanced decision-making. This data-driven approach assists foundries in identifying new business models and strategies by adding extra value to the company.

Emergence of 3D printing:

The growth of 3D printing technology is propelling various industries, including medical, aerospace, and automotive. Although it may not entirely replace traditional manufacturing methods, 3D printing is increasingly employed to prolong the lifespan of ageing tools in 200-mm manufacturing, presenting a cost-effective solution. This technology is particularly well-suited for foundries requiring high-value, low-volume production. 

The advent of 5G and IoT:

The increasing demand for efficient semiconductor foundry services is driven by the rising popularity of mobile, network-capable devices with internet access and multimedia capabilities. IoT systems analyze data to assist users in connecting various items to the internet and making informed decisions. Consequently, these systems have applications in diverse industries, including electronics, retail, and the medical and automotive sectors.

In the present era, mobile telecommunications networks operate at much higher speeds, reliability, and lower latency owing to the transition to 4G and the subsequent upgrade to 5G. The shift to 5G is essential for enabling high-speed connections that meet the data requirements of all Internet-connected devices. The semiconductor foundry industry is expected to expand due to the increased demand for semiconductors driven by the adoption of these new smartphones.

How are frontrunners optimizing their business potential?

The global semiconductor foundry industry is dynamic and is dominated by top entities. The frontrunners are implementing novel strategies such as collaborations, mergers, acquisitions, and many more to sustain industry competition.

For instance, Tower Semiconductor, a leading provider of high-value analogue semiconductor foundry solutions, has recently announced a collaboration with Renesas. This partnership is focused on using Tower's high-volume and high-performance Silicon Germanium (SiGe) BiCMOS technology for the SiGe-based beamforming Integrated Circuits (ICs) production.

The strategic collaboration highlights Renesas' dedication to innovation. Renesas has already designed a comprehensive portfolio of beamforming ICs that have secured design wins from key global players in the 5G, Satcom, and Aerospace & Defense sectors. This positions the company at the forefront of the industry, showcasing its commitment to advancing technology and maintaining a competitive edge.

To summarize, the global semiconductor foundry industry is expanding rapidly, owing to increased IoT technology and a surge in the utilization of consumer electronics. Furthermore, investments in semiconductor wafer fabrication devices and materials are expected to open new avenues for the industry in the future. 

For more details regarding industry dynamics, opportunity analysis, and frontrunner tactics, contact our experts today!

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