The semiconductor market could explode to US$1 trillion by 2030Picture: John M Lund Photography Inc (DigitalVision) .
Noticed the cost of cars going up recently? Your latest smartphone was a bit pricer than you thought it would be?You’re not taking crazy pills. What you’re seeing are the effects of a global semiconductor shortage.Basically, semiconductors are the brain of electronics and they are used in the fabrication of smartphones, digital cameras, TVs, washing machines, refrigerators, cars – almost everything you use in day-to-day life.And when everyone started staying home ‘cos of COVID, we started using more and buying more devices. So semiconductor demand soon outstripped supply.In December 2020, a study by the Office of the NSW Chief Scientist & Engineer flagged that the global semiconductor market for chips alone was a US$400+ billion industry and even suggested that some estimates forecast it could reach US$1 trillion by 2030.
Weebit Nano (ASX:WBT) CEO Coby Hanoch seconds that demand is set to grow.“It’s a huge market, just think for a second about all the surveillance cameras you see popping up everywhere, just think about the number of videos that my wife takes of the kids – that’s all building this industry,” he said.“People are now on TikTok and Instagram and the amount of data that we’re generating every second is mind-boggling – and the demand for memory is growing insanely fast.”This growth isn’t just anecdotal – it’s backed by the facts.Data for May from the World Semiconductor Trade Statistics (WSTS) organisation showed global semiconductor industry sales of $43.6 billion. That’s an increase of 26.2% over the May 2020 total of $34.6 billion and 4.1% more than the April 2021 total of $41.9 billion.For 2022, the WSTS predicts the market will grow to by 8.8 per cent to US$ 573 billion, driven by a double-digit growth of the memory category.Semiconductors can’t function without memoryThe vast amounts of information that are being stored on computers, laptops, tablets, and smartphones today, primarily use flash memory technology, and the company is developing a Resistive Random-Access-Memory (ReRAM) module – a new kind of memory technology that’s much faster and requires less power to operate than traditional flash memory.This is vital in the semiconductor industry where volatile and non-volatile memory (NVM) technologies play critical roles in data processing and information storage in nearly every electronic product.“It’s become now the largest segment in the semiconductor space – and semiconductors are growing very, very fast,” Hanoch said.“The whole world has undergone such an amazing transformation – everything you touch, you everything you do has semiconductors in it whether it’s your washing machine, your microwave oven, your refrigerator, or even your clothing.“Semiconductors are everywhere you look, and semiconductors cannot function without memory, you have to have memory everywhere.”Hanoch said what sets the company’s ReRam module apart from other memory tech is its longer battery life and higher endurance.“The best example I can give is, a few months ago, Tesla had to recall 160,000 cars and it wasn’t because the engine didn’t work or the braking system didn’t work, it was because of non-volatile memory didn’t function – it wore out.“Our memory is much more resilient and with our memory, they wouldn’t have had that problem.”Manufacturing demand creates opportunitiesWeebit recently announced it has completed the design and verification stages of the ReRAM module and taped-out (released to manufacturing) a test chip that integrates the module.“We put on a single chip the processor and all kinds of other elements so that it really looks like a customer chip which we can use to demonstrate to customers how the technology will work in their environment,” Hanoch said.Weebit is now in talks with potential customers as well as working with production facilities on transferring the technology to a mass production facility for commercialisation.The company expects to have its first silicon samples of the embedded ReRAM module towards the end of this year and plans to demonstrate the module and report functional testing results in the first quarter of 2022 – with qualification of the module expected by mid-2022.It’s important to note though, that lockdown measures over the last 18 months have made it difficult for manufacturers to react to increased demand across the supply chain.
Goldman Sachs research’s Toshiya Hari said that market tightness should ease in Q3-Q4 and into 2022 with “many governments in the process of making policies to fund domestic semiconductor industries to a) address the shortage, b) create more robust local supply chains and c) for national security purposes.”And on June 8, the US Senate approved $52 billion to fund the semiconductor manufacturing, design, and research provisions in the Creating Helpful Incentives for the Production of Semiconductors (CHIPS) for America Act as part of the US Innovation and Competition Act (USICA) – but it’s yet to be approved by the House.“Boosting domestic chip manufacturing and research will keep America on top in semiconductors, which underpin the game-changing technologies of today and tomorrow,” US Semiconductor Industry Association president and CEO John Neuffer said.This presents not only an opportunity for developers like Weebit – but also for companies that produce the tools and machinery to make chips – and semiconductor companies that can fabricate their own.Essentially, higher demand could drive investments in chip fabricators.
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