Semiconductor companies have the potential for significant growth for investors
Aisa International regularly reviews the markets, including the emerging markets and those funds that invest in the semiconductor industry.
Such funds that invest in semiconductor companies may be considered for our Growth portfolios, as these companies have the potential for significant growth for investors.
It is always helpful to learn a little about newer technologies that could offer financial growth. Read on to learn the basics.
The semiconductor industry is at the heart of today’s digital age, powering everything from smartphones and computers to cars and industrial machines. Semiconductors, materials with properties between those of conductors and insulators, are essential for creating integrated circuits (ICs), also known as chips, which serve as the brains of most electronic devices.
What Are Semiconductors?
Semiconductors are materials, such as silicon, that can either conduct or block electrical currents under different conditions. This ability to control the flow of electricity makes them ideal for making transistors—the basic building blocks of all modern electronics. The global semiconductor industry designs and manufactures these chips, which contain millions or even billions of transistors packed into a tiny area.
Key Players in the Semiconductor Industry
The semiconductor industry is dominated by a few major players, both in terms of companies and regions. Leading companies include Nvidia, AMSL, TSMC (Taiwan Semiconductor Manufacturing Company), Samsung, Qualcomm and other. Each of these companies plays a crucial role in designing, manufacturing, or selling semiconductor devices.
The semiconductor industry can be divided into several key phases and areas, architectures (ARM), design, semiconductor manufacturing and assembly. This complex ecosystem involves many different actors and processes working together to produce the chips that power modern electronic devices. Below is an overview of the main phases and processes in the semiconductor industry:
Design
Semiconductor design focuses on creating the architecture (ARM) and design of chips that determine their functionality and performance. In this phase, companies design how the chip will work and create technical specifications.
Fabless companies: these companies specialize only in chip design and do not have their own manufacturing plants. Examples are companies such as NVIDIA or AMD. Once the chip design is complete, they outsource production to third parties such as specialised factories (called foundries).
EDA (Electronic Design Automation) tools: companies such as Cadence and Synopsys provide software that allows engineers to simulate and optimise chip design.
Chip design involves several steps:
System architecture: planning what performance and features the chip will have.
RTL design (Register Transfer Level): Defining how the different parts of the chip will process data.
Verification: Simulating and testing the design to ensure that the chip will perform as expected.
Manufacturing
Semiconductor manufacturing is the most technically demanding part of the process and takes place in special factories called fabs (fabrication plants). Chip fabrication involves many steps, the most important of which are as follows:
Foundries: companies that specialize in making chips based on other companies’ designs. The largest foundries are TSMC (Taiwan) and Samsung Foundry (South Korea). Manufacturing takes place in extremely clean environments where chips are produced on silicon wafer substrates.
Lithography: The most important manufacturing process, where light is used to create patterns on a silicon wafer that define the placement of transistors and other chip components. ASML Holding NV. A Dutch company. One of the largest suppliers in the world of photolithography systems for the semiconductor industry.
Etching and doping: These processes modify the wafer surface to create the electrical properties needed for each layer of the chip.
Deposition: Depositing thin layers of materials onto the wafer to create different electrical properties.
Assembly and Packaging
After wafers are manufactured, the chips must be cut into individual pieces, known as dies, and then mounted in housings that protect the semiconductor from damage and allow it to be connected to electronic circuits. This step involves:
Testing
Packaging: the chip is placed in a protective case that makes it easy to install on a printed circuit board (PCB). This housing protects the chip and provides pins or pins for connection to external circuitry.
After the chips are assembled, extensive testing and quality control follows to ensure that all manufactured semiconductors meet specifications. Testing includes both functional and reliability tests to ensure that the chips can withstand long-term use. This step is key to minimizing defective chips and maximizing yield.
