Contents 1 Introduction Semiconductor Industry 2 Challenge Changes in the 3 Fabrication Process Megatrends Impacting 4 Semiconductor Growth Semiconductor Business 5 Continuity Solutions Critical Power Solutions 6 Address Megatrends New Industry Demands 7 Require New Solutions R Resources F Footnotes Innovative Power Solutions for Semiconductor Fabrication Efficiency Schneider Electric Reference Guide Contents Introduction 1 Introduction Today, the semiconductor industry has worldwide revenues Semiconductor Industry approaching $400 billion. Projections are that this number 2 Challenge will climb substantially over the next 10 years, thanks to significant growth driven by three megatrends: Changes in the 3 Fabrication Process • The Internet of Things (IoT) • Self-driving cars Megatrends Impacting • Sustainability improvement efforts 4 Semiconductor Growth However, for the semiconductor industry these trends and their associated business opportunities present Semiconductor Business the challenges of reducing chip making costs while Continuity Solutions 5 decreasing the greenhouse gas emissions produced. The semiconductor manufacturing process requires Critical Power Solutions substantial consumption of electricity, so efforts to build 6 Address Megatrends in energy efficiency are vital. Advanced electrical power distribution technology in the form of automatic New Industry Demands transfer switches (ATSs), energy efficient uninterruptible 7 Require New Solutions power supplies (UPSs), optimized electrical distribution architectures, as well as other physical infrastructure can The semiconductor industry is poised for break through global demand. be combined with cloud analytics to help accomplish this. R Resources perform its assigned function is always declining over time. This reference guide will go over the basics of The megatrends mentioned above will be discussed in semiconductor manufacturing and the economic drivers more detail, including why they are different in nature than F Footnotes for the industry such as the fact that the cost for a chip to previous challenges the industry has faced. The reference guide will also describe power technology solutions, showing how these can improve business The semiconductor continuity. That is critical in reducing manufacturing costs industry has worldwide because it eliminates unplanned downtime, which can revenues approaching be quite expensive. Removing this unbudgeted expense through better power management can contribute $400 billion. significantly to lowering manufacturing costs. 2 Contents Introduction (cont’d) 1 Introduction Other power technology solutions can ensure the Semiconductor Industry availability and quality of electricity while improving energy 2 Challenge efficiency, thereby meeting the challenges posed by the megatrends. These technologies include solutions that Changes in the protect both the upstream main incoming utility power and 3 Fabrication Process the downstream microprocessor dependent systems that are the basis for manufacturing. Megatrends Impacting 4 Semiconductor Growth Finally, in implementing such solutions, this guide will outline why it is important to have the right partner with the appropriate expertise. An experienced partner will Semiconductor Business make it possible to reap the benefits of energy efficient Continuity Solutions 5 power solutions more quickly, while also ensuring business continuity. This guide will review what to look for in such a Critical Power Solutions power technology partner. Finding the right power technology partner is key to addressing 6 Address Megatrends efficiencies and ensuring uptime. Read on to discover how the semiconductor industry can New Industry Demands take on the many opportunities and challenges of the future 7 Require New Solutions as well as harnessing solutions that will propel it forward. R Resources F Footnotes 3 Contents Semiconductor Industry Challenges 1 Introduction The semiconductor industry‘s sales were $338.9 billion cut chip costs while not compromising on safety or quality. Semiconductor Industry in 2016, with a forecast of $346 billion in 2017 and $354 The new challenges are: 2 Challenge billion in 20181. So, revenues are expected to grow 4.4 percent over two years. Historically, industry revenues • Internet of Things (IoT) Changes in the grew at more than twice that rate from 1996 to 2016, 3 Fabrication Process with a compound annual growth rate (CAGR) of 4.8 • Self-driving cars percent2. The recent slowdown is due to smaller increases Megatrends Impacting in the top selling segments of logic, memory and MPU • Sustainability improvement efforts 4 Semiconductor Growth semiconductors3 arising from slower sales increases among the consumer products that require these chips. The IoT consists of objects that are linked to other Internet- However, in looking out to 2025, predictions are for growth enabled devices and systems through an IP address, with Semiconductor Business to again surge, with $655.6 billion in annual chip sales in the resulting connectivity allowing two-way communication Continuity Solutions 5 2025 and a CAGR from 2015 to 2025 of 6.7 percent4. between the object and devices and systems. The number of connected devices is growing rapidly, from 6.6 billion Critical Power Solutions In part, the surging historical sales were due to shrinking in 2016 to an estimated 22.5 billion in 2020. Building out 6 Address Megatrends feature sizes5, which enable chips to perform more the IoT will require an investment of $4.8 trillion8, with that functions at a lower cost. Another part New Industry Demands of the cost reduction has come from increased wafer sizes, which went from $700B 7 Require New Solutions MPU 200 to 300 mm6 from 1992 to 2002 and MCU $600B could in the future move to 450 mm. DSP Standard Cell ASIC Resources Bigger wafers allow more chips to be $500B R FPGA produced, resulting in manufacturing Special Purpose Logic $400B expense cuts of as much as 40 percent General Purpose Logic Footnotes during the transition from one size to Display Driver F the next. These cost-cutting techniques $300B Analog are still being pursued, along with Semiconductor Market design innovations. $200B MOS Memory $100B However, the industry today faces some Other Semiconductor unique challenges that are unlike those $0B that have confronted it before. They 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 come from three different fronts and are on top of the standard requirements to Source: Handel Jones, Semiconductor Industry from 2015 to 2025, SEMI Organization, 2015 4 Contents Semiconductor Industry Challenges (cont’d) 1 Introduction sum coming initially from industry and then indirectly from Semiconductor Industry consumers. 2 Challenge Those forecasts have attracted considerable attention Changes in the because they represent a significant opportunity, 3 Fabrication Process particularly for the semiconductor industry. Every IoT connected object, whether it is a traffic light or a cow9,10, Megatrends Impacting will need integrated circuits and there will be others in 4 Semiconductor Growth support functions. There will be sensors that capture physical measurements of interest while other chips transmit the data, although it is possible that these two Semiconductor Business functions and others will be done by a single IC (integrated Continuity Solutions 5 circuit). Still other semiconductors will aggregate the data and move it to data centers, where processors will sift The semiconductor industry is adapting to challenges and opportunities Critical Power Solutions through everything to create actionable intelligence. with shifting market demands. 6 Address Megatrends Much of the backend for the IoT is similar to what is For those billions of objects to be connected, the chips New Industry Demands done today for big data applications, and the increased must be inexpensive, low-power and otherwise very light on 7 Require New Solutions analysis needs driven by the IoT will up the demand for resources. If they are not, the economics will work against semiconductors used in data centers. The sensors and the wide-spread and massive IoT deployment predicted. other integrated circuits that go onto the objects that are R Resources the basis for the IoT are a different type of semiconductor. Likewise, self-driving cars represent a significant opportunity and challenge for semiconductors. A fully autonomous vehicle will have $550 more semiconductor Footnotes content than today’s cars,11 and there will be millions of F The number of connected them12 produced annually within 10 years, according to analysts. However, that opportunity comes with a devices is growing rapidly, challenge: making the many ICs needed at a low enough from 6.6 billion in 2016 cost while still ensuring that they perform in the harsh to an estimated 22.5 billion automotive environment. in 2021. As for sustainability and the need to lessen environmental impact, it is true that the semiconductor industry has long sought to minimize its resource demands for economic 5 Contents Semiconductor Industry Challenges (cont’d) 1 Introduction accounted for in today’s energy strategies. Semiconductor Industry 2 Challenge Because semiconductors provide the brains and communication capabilities for many products, they are Changes in the uniquely suited to respond to such requirements. These 3 Fabrication Process do place additional requirements on chips, however. The industry has started to respond to such needs, as well as 14 Megatrends