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The semiconductor industry in 2020 grew at the rate of ~11% and is on its way to almost doubling it to ~18% in 2021. This growth is mainly due to the increasing share of semiconductor products in day-to-day life. Several high-tech solutions are running on semiconductors, and year on year, the demand for such solutions is increasing.
Demand drivers are the area that the semiconductor industry extensively serves. These demand drivers ensure that the solutions provided by different semiconductor companies end up getting utilized to drive high-tech products. These demand drives are also the building blocks of numerous high-tech industries, and the application area ranges from consumer to industry.
Computing: Computing industry is by far the most semiconductor demand generating domain. From laptops to servers, semiconductor products are powering all day-to-day life. As the data workload has become more complex, the need for advanced computer chips has increased. Hence, computing has become a critical demand driver for the semiconductor industry.
Transportation: From aircraft to trains to metros to automotive, everything is becoming more automated and advanced. These industries are demanding new features that can provide safety and entertainment at the same time. It is where efficient semiconductor chips are required and therefore have become a vital demand driver for semiconductors.
Telecommunication: Both wired and wireless solutions are heavily dependent on semiconductors. As the need for secured high-speed connectivity has increased, the demand for novel semiconductor solutions has increased further. It makes telecommunication another big demand driver for the semiconductor industry.
These demand drivers are creating a new market, which often demands new features. These new features eventually mean that new and advanced semiconductor solutions are available. For example, a new wireless solution (6G) will demand secure chips to drive high-speed voice and data traffic. Such a new feature market creates new opportunities for the semiconductor industry, and every year new landmark technology are launched. Thus, ending up enabling more demand for semiconductors.
As the world becomes more hyper-connected and remote, these demand drivers will keep creating the markets for new semiconductor solutions. And, it will be important that both the academia and industry keeps investing heavily in the research aspect of the semiconductor. As it will be key in enabling new semiconductor solutions ahead of time.
Manufacturing: The manufacturing industry relies on automated solutions from robots to equipment. All these solutions require advanced chips that need to work without introducing an error. Such market is driving the semiconductor industry revenue to new levels.
Consumer: Consumer products like smartphones, gaming consoles, security solutions, appliances, and so on are all heavily equipped with semiconductor chips. The consumption of such solutions is increasing year on year, and thus makes consumer solutions another demand driver for the semiconductor industry.
Investing more in the research aspect will ensure that the semiconductor industry at large is prepared for the next-gen needs of the demand drivers. It is important to do so as the key demand drivers have to be presented with the next innovative solution ahead of time, and this requires different semiconductor companies to provide a robust technology roadmap that can provide a high-level of confidence. As the semiconductor industry grapples with Moore’s law and the More-Than-Moore debate, it will be crucial to focus on how the demand drivers evolve.
In the long term, companies that can articulate and deliver the right product at the right time to the right market will win continue to win the semiconductor race.
