Supply chain and investments are centrestage at regional semiconductor conference
Estimated reading time: 4 minutes
As SEMICON Southeast Asia kicked off Day 1, it seemed serendipitious that United States’ VP, Kamala Harris, is also in the region to build trade relationships with countries seen as crucial to the semiconductor supply chain.
Bloomberg has reported a shortfall in chip supplies, forcing automobile manufacturers like GM to limit their production of cars.
But this isn’t the only impact from the worldwide shortage of chip supply. In his welcome address, President and CEO of SEMI, Ajit Manocha drew attention to the exponential increase in demand for chips across a growing number of industries.
Mr. Gan Kim Yong added that Singapore’s determination to ensure fab facilities and supply chain remained open and operating last year, had contributed to 2 major investments into Singapore – Global Foundries’ USD4 billion capacity expansion for automotive and 5G industries, and another EU2 billion to build a new 12-inch wafer manufacturing plant.
Ajit gave a top-level view of 5G communications tech and data centres as key semiconductor industry drivers – it isn’t just the usual technologies that are facing supply shortage of chips.
Disruptive technologies like 5G, artificial intelligence and high-performance computing are fuelling the usage of more processors in more devices and machines and instruments. This exacerbates a processor shortage that is more acute than it seems.
And this ongoing crunch as well as anticipated acute shortage, is really driving the semiconductor investments announced this year.
Chip shortage – building production capacity
Semiconductor sales are expected to grow over 20-percent to USD550 billion in this year, according to IDC. Chip shortages for the auto industry is now also being felt across the board for legacy technologies.
For example, there is TSMC’s USD100 billion investment over the next 3 years to increase production capacity. South Korea is also bolstering their capacity with Samsung’s USD116 billion capacity investment, and SK Hynix’s USD106 billion for a fab complex. Intel plans to expand capacity with USD20bn investment into its foundry business, while Micron plans USD9 billion for CAPEX spending, this year.
Singapore currently hosts wafer fabrication facilities for five of the top 12 semiconductor companies, globally. It is also home to critical R&D functions.
On top of these private sector investments are government investments by countries like US, China, Europe, Japan and Korea, which overall aim to bolster their respective industries with policies, incentives and funding. The European Union has earmarked USD160 billion from its coronavirus response fund, for tech investment.
Ajit said, “Believe it or not, (globally) there are 72 new fabs (plants) coming in the next four years.”
Growth for Singapore
The event’s guest of honour, Minister of Trade and Industry, Mr. Gan Kim Yong said, “The theme of this year’s conference ‘Powering innovation, 5G and beyond,’ is of significant interest to all of us.”
The minister described Singapore as being one of the first movers with 5G, having rolled out 5G infrastructure last year, and aiming to achieve 5G coverage for half the island nation by end of 2022.
He cited the semiconductor industry as being a major driver and beneficiary of 5G roll out, and shared that the growth of digitalisation will continue to intensify the value of the global semiconductor industry.
The industry is estimated to be USD440 billion last year, and is expected to grow to half a trillion US dollars this year. Singapore currently hosts wafer fabrication facilities for five of the top 12 semiconductor companies, globally. It is also home to critical R&D functions.
Manufacturing, remains a critical pillar of Singapore’s economy, Mr. Gan had said. He added that Singapore’s determination to ensure fab facilities and supply chains remained open and operating last year, had contributed to major investments into Singapore – Global Foundries’ USD4 billion capacity expansion for automotive and 5G industries, and another EU2 billion to build a new 12-inch wafer manufacturing plant.
SEMI’s role
Ajit said, “So, semiconductors have become a real key strategic driver for every company, every industry, every country. A chip is inside everything, and I will say that awareness has changed. Almost everyone is starting to understand the benefits, importance and relevance of semiconductors, especially the chip.”
According to Ajit, thanks to semiconductors we were able to develop a vaccine in a shorter amount of time than usual – processors had powered the super computing for required genome sequencing to happen.