Simply put, semiconductors strengthen our country. Toggle navigation. What is a Semiconductor? Semiconductors are the Brains of Modern Electronics. Stages of Semiconductor Production.
Step 1: Research Pre-competitive basic research is essential to the semiconductor industry and the first step in the semiconductor production process. Step 2: Design Engineers use highly sophisticated equipment to design semiconductors, similar to how architects design buildings. Step 3: Raw Materials Many semiconductors start out as sand, which contains a large amount of silicon, but other pure materials can also be used. Step 5: Blank Wafer The ingot is then sliced into very thin 1 mm silicon discs and polished to a flawless finish.
Step 6: Finished Wafer Next, wafers are printed with highly intricate circuit designs that will later become individual chips. Step 7: Cut Wafer The silicon wafer containing finished semiconductors, sometimes as many as 70, per wafer, is then cut up into tiny individual semiconductors called dies.
Step 8: Packaged Chip These dies are then packaged into finished semiconductors, which can be placed into devices. Step 9: Chip on Circuit Board Finished semiconductors are embedded in countless electronics devices, from computers and smartphones to highly advanced medical equipment and supercomputers.
Semiconductors Improve Our Lives. Semiconductors Build Our Future. The semiconductor industry is leading the greatest period of progress in history. Before that, the mechanics of computing had been performed by vacuum tubes, which were slow and bulky.
Silicon changed everything. Manufacturing transistors out of silicon allowed them to be made small enough to fit on a microchip, opening the gates to a rush of gadgets that have become smaller and smarter by the year. The pace of innovation was unprecedented. Chips began to be miniaturised at such a steady rate it was as if the technology was following a law.
Only now, when attempts to shrink transistors any smaller are bumping up against the limits of physics, has the pace of miniaturisation slowed. Early transistors could be seen with the naked eye.
Now a tiny chip holds many billions of them. More than anything else, it is this exponential improvement in manufacturing that has driven the digital revolution. But silicon, the element at the heart of this revolution is a surprisingly humble substance, and one of the most common on the planet. A technology that has spread across the world is made from one of the most ubiquitous substances on it.
The semiconductor business has also become one of the most interlinked in history, with raw materials coming from Japan and Mexico and chips made in the US and China.
But that vast worldwide network can trace its origins to just a handful of very specific places. High-end electronics require high-quality ingredients. The purest silicon is found in quartz rock and the purest quartz in the world comes from a quarry near Spruce Pine in North Carolina, US. Millions of the digital devices around the world — perhaps even the phone in your hand or the laptop in front of you — carry a piece of this small North Carolina town inside them.
The rocks around Spruce Pine are unique. High in silica, a silicon-containing compound, and low in contaminates, the region has been mined for centuries for gemstones and mica, a silicate used in paint. But the unearthed quartz was discarded. Then came the rise of the semiconductor industry in the s and quartz turned into white gold.
Rocks extracted from the ground with machines and explosives are put into a crusher, which spits out quartz gravel. This then goes to a processing plant, where the quartz is ground down to a fine sand.
Silicon and germanium are somewhere in between and are considered semiconductors. To find materials that work with light, you have to look to either side of the IVA column of the periodic table. These materials, including gallium arsenide, are used to create lasers, LED lights, and photodetectors. These include combinations of zinc, cadmium, mercury, and tellurium. The production of semiconductors is a big business that can bring in a lot of money.
Semiconductor production seems to be a top priority for officials in China. The U. The recent trade disputes with the U. To avert a looming trade war with the U. A former Huawei employee has accused the company of trying to steal intellectual property to help China achieve technological dominance over the US. Huawei and its FutureWei unit sued Huang and his start-up CNEX Labs last December, accusing Huang of making off with sensitive trade secrets related to semiconductor technology that uses integrated circuits as memory to store data.
Huang, in a response filed on Tuesday, said Huawei got it backward. He claims he was hired so the Chinese company could take control of his inventions for Solid State Disk Non-Volatile Memory and then, after he left, sought to obtain proprietary information from his new company. This lawsuit goes beyond semiconductor technology, however. Now as we move away from the tensions between China and the U. It is widely predicted the doubling of silicon transistors per unit area every two years will come to an end around as the technology reaches its physical limits.
As a result, many semiconductor companies carry out design and marketing but choose to outsource some or all of the manufacturing. Known as fabless chip makers, these companies have high growth potential because they are not burdened by the overhead associated with manufacturing, or "fabrication. Aside from investing in individual companies , there are several ways to monitor the investment performance of the overall sector.
There are also indices that break the sector down to chip makers and chip equipment makers. The latter develops and sells machinery and other products used to design and test semiconductors. In addition, certain markets overseas, such as Taiwan, South Korea, and to a lesser extent Japan, are highly dependent on semiconductors and therefore their indices also provide clues on the health of the global industry.
If semiconductor investors can remember one thing, it should be that the semiconductor industry is highly cyclical. Semiconductor makers often see "boom and bust" cycles based on the underlying demand for chip-based products.
When times are good, profit margins can run very high for chipmakers; when demand falls through, however, chip prices can fall dramatically and have a major effect on many industries' supply chains.
Demand typically tracks end-market demand for personal computers, cell phones, and other electronic equipment. When times are good, companies like Intel and Toshiba can't produce microchips quickly enough to meet demand. When times are tough, they can be downright brutal. Slow PC sales, for instance, can send the industry—and its share prices—into a tailspin.
At the same time, it doesn't make sense to speak of the "chip cycle" as if it were an event of singular nature. While semiconductors is still a commodity business at heart, its end markets are so numerous—PCs, communications infrastructure, automotive, consumer products, etc.
Surprisingly, the cyclicality of the industry can provide a degree of comfort for investors. In some other technology sectors, like telecom equipment, one can never be entirely sure whether fortunes are cyclical or secular. By contrast, investors can be almost certain that the market will turn at some point in the not-so-distant future. While cyclicality offers some comfort, it also creates a risk for investors. Chipmakers must routinely take part in high-stakes gambling.
The big risk comes from the fact that it can take many months, or even years, after a major development project for companies to find out whether they've hit the jackpot, or blown it all. One cause of the delay is the intertwined but fragmented structure of the industry: Different sectors peak and bottom out at different times. For instance, the low point for foundries frequently arrives much sooner than it does for chip designers. Another reason is the industry's long lead time : It takes years to develop a chip or build a foundry, and even longer before the products make money.
Semiconductor companies are faced with the classic conundrum of whether it's the technology that drives the market or the market that drives the technology. Investors should recognize that both have validity for the semiconductor industry. Because companies spend a large amount of revenue on research and development that can take several months or even years to pay off—and sometimes not even then if the technology is faulty—investors should be wary of statements made by companies who claim to have the latest and greatest technology in the semiconductor industry.
A semiconductor essentially functions as a hybrid of a conductor and an insulator. Whereas conductors are materials with high conductivity that allow the flow of charge when applied with a voltage, and insulators do not allow current flow, semiconductors alternately act as an insulator and conductor where necessary.
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