Strategic Developments in Semiconductor Foundry Technologies and Their Global Impact

The semiconductor foundry sector plays a significant role in the technology sector. A semiconductor foundry is a company that produces computer chips for different industries. These chips are important for powering devices such as smartphones, computers, and vehicles. The dependence on semiconductor chips is necessary since they enable key functions like processing and connectivity. Any disruption in chip production could delay product development and technological progress. However, the demand for advanced chips is increasing as technology evolves. For example, smartphones require chips designed to execute artificial intelligence while electric cars rely on advanced chips to sustain performance as well as safety capabilities.

Moreover, the increased demand offers new opportunities for innovation in the foundry sector. Major companies such as TSMC, Samsung, and GlobalFoundries are leading manufacturers of advanced chips and invest heavily in fabrication technologies. Competition among these companies fuels innovation in design and production. In addition, collaboration with clients to meet their unique needs is also important. Therefore, the semiconductor foundry industry drives innovation in multiple sectors and plays a vital role in the modern technological landscape.

Smart devices and connectivity driving growth in the semiconductor foundry industry

Over the years, the semiconductor sector has witnessed notable growth due to the rise in demand for internet-connected devices that utilize sensors and software to gather and analyze data. For example, smart factories permit businesses to monitor shop floor activities, guarantee machines operate efficiently, save floor space, and reduce costs. Similarly, the advent of smart homes has empowered users to control lights and appliances through smartphone apps, developing a more interconnected living environment. This incorporation is facilitated by IoT devices, which enhance home automation and security. For instance, IoT devices enable remote monitoring of home security systems, allowing users to unlock doors and windows or detect smoke leaks directly from their smartphones. This seamless connection between smart home technology and IoT devices enhances convenience and safety for users. 

Advancements in mobile telecommunications networks, particularly the transition from 4G to 5G, have enhanced speed, reliability and latency. High-speed connections are now essential for delivering data to Internet-connected devices, stimulating the development of 5G-compatible smartphones. This surge in demand for advanced devices has also increased the need for semiconductors. Consequently, the semiconductor foundry sector has expanded rapidly to meet this growing demand. According to Allied Market Research, the global semiconductor foundry market was worth $106.9 billion in 2022 and is anticipated to gain $231.5 billion by 2032. This remarkable growth has developed lucrative opportunities for the industry.

In addition, the semiconductor foundry industry continues to grow due to the increasing demand for automotive chips. This is driven by advancements in autonomous driving technology. These foundry services are vital for various sectors, including telecommunications, consumer electronics, automotive, and computer networking. The rising popularity of mobile and internet-connected devices with multimedia capabilities has also increased the demand for efficient semiconductor solutions.

It is worth mentioning that IoT technology has been proven to be highly effective in data analysis, enabling the connection of multiple devices to the Internet and facilitating informed decision-making across industries such as electronics, healthcare, retail, and automotive. For example, in 2021, South Korea introduced a national semiconductor industrial policy under President Moon Jae-in to strengthen its leadership in the semiconductor sector and aim for at least second place globally by 2030. The key measures included 50% tax credits for R&D, 16% for manufacturing, $886 million in long-term financing, $1.3 billion in government investments in R&D, regulatory reform,s and infrastructure advancements. According to the Semiconductor Industry Association (SIA), these tax benefits could save Korean chip companies as much as $55–$65 billion over the years and thus further accelerate industry expansion.

Cutting-edge technological innovations in semiconductor foundry

Semiconductor foundries are leading the way in technological innovation and playing an important role in the semiconductor industry. Here are some modern developments in this field.

Extreme ultraviolet lithography (EUV)

Extreme ultraviolet (EUV) lithography permits semiconductor companies to engrave intricate patterns onto silicon wafers by using shorter wavelength light, which facilitates the development of smaller and more efficient transistors. For example, Taiwan Semiconductor Manufacturing Company (TSMC) uses EUV technology for its 5nm chips, improving the processing abilities of devices like the iPhone. For example, ASML is the world's leading EUV lithography equipment manufacturer. TSMC and Samsung use ASML's EUV machines to produce advanced chips for smartphones, high-performance computing, and many other applications.

3D packaging and chipset integration

3D packaging technologies stack multiple small chips, known as chiplets. This lowers signal delay and provides better performance than traditional 2D packaging. For instance, AMD's Infinity Fabric uses chipset technology in its Ryzen and EPYC processors, permitting multiple chipsets to be interconnected through their Infinity Fabric. This approach enhances performance and scalability while reducing manufacturing costs.

Gate-All-Around (GAA) transistors

The GAA (Gate-All-Around) transistor architecture represents a significant advancement over FinFET technology by providing advanced electrostatic control and reducing leakage currents. This innovation enables transistor miniaturization. This results in enhanced performance and improved power efficiency. For instance, Samsung's 3nm GAA system represents the first implementation of this technology in 3nm processor nodes, which guarantees better performance and lower power consumption for mobile devices and high-performance computing applications.

Digital twin technology 

Digital twins create virtual replicas of semiconductor manufacturing processes. Thus, it is possible to monitor and optimize these manufacturing processes in real time for better efficiency, yield, and less downtime. For example, GlobalFoundries utilizes digital twin technology to simulate and optimize its manufacturing processes, thus offering improved operational efficiency and better yields.

Quantum computing solutions

Quantum computing is the next evolution of semiconductor technology, where the semiconductor foundries are rapidly investigating qubit fabrication and the integration of quantum processors with traditional computing systems. For instance, IBM leads in this field by introducing Quantum Hummingbird processors that exploit superconducting qubits. The organization is also collaborating with various foundries to promote mass production and scaling of quantum chip technology.

Recent developments in the semiconductor foundry sector 

Major industry players in the sector are innovating new technologies, launching novel products and forming strategic alliances to reinforce their foothold in the industry. For example,

Hua Hong Semiconductor invested in a new chip factory with a $2.5 billion IPO

In November 2022, Hua Hong Semiconductor Ltd., a Chinese chip company obtained approval for an 18-billion yuan ($2.5 billion) IPO in Shanghai. The funds raised from this IPO are expected to be used to build a new chip-making factory in Wuxi. Construction of this factory began in 2023, and it has a production capacity of 83,000 wafers per month. The funds are to be used to upgrade an existing 12-inch factory in Wuxi, maximizing its capacity to 95,000 wafers per month. Currently, Hua Hong operates three 8-inch factories in Shanghai and one 12-inch fab in Wuxi.

This initial public offering (IPO) follows the successful $6.6 billion IPO of Semiconductor Manufacturing International Corp (SMIC) on the STAR market in 2020. Because of the prevailing U.S.-China semiconductor tensions, Washington has implemented restrictions on the export of advanced chip-making equipment. As indicated by research firm TrendForce, Hua Hong operates primarily in the domain of mature technology, producing chips using 55-nanometer processes. They currently hold a 3.2% share in the global foundry sector.

HCLTech and Intel Foundry collaborated to enhance the semiconductor ecosystem for global clients

In February 2024, HCLTech announced an expanded collaboration with Intel Foundry to co-develop customized silicon solutions for semiconductor manufacturers, system OEMs, and cloud service providers. This partnership utilizes HCLTech's design expertise and the advanced technology and manufacturing capabilities of Intel Foundry to create a resilient and diversified supply chain.

This initiative addresses the growing global demand for semiconductors while offering clients a robust ecosystem for semiconductor sourcing along with the development of flexibility and choice. The president of Engineering and R&D Services at HCLTech, Vijay Guntur, noted the contribution of Intel's advanced technologies and silicon-verified IPs in offering innovative and inclusive solutions to mutual clients.

HCLTech has had a three-decade-long partnership with Intel, focusing on joint offerings and investments across silicon services, telecom, servers, hardware engineering, and storage solutions. Rahul Goyal, VP at Intel Foundry, stated that they remain committed to promoting an open and robust ecosystem for clients seeking sophisticated silicon solutions.

To conclude, the semiconductor foundry sector is witnessing rapid expansion because of the increasing demand for smarter devices, faster mobile networks, and automotive technologies. This growth presents lucrative possibilities for industry development, as companies invest in advanced manufacturing technologies, collaborate on innovative solutions, and address the rising global demand for high-performance chips in multiple industries.

Trending Reports in the Semiconductor and Electronics Industry:

The global wide bandgap semiconductors market size was valued at $1.6 billion in 2022 and is projected to reach $5.4 billion by 2032, growing at a CAGR of 13.2% from 2023 to 2032.

The power semiconductor market was valued at $48.9 billion in 2022 and is projected to reach $79.9 billion by 2032, growing at a CAGR of 4.9% from 2023 to 2032.