The foundation on which the technologically driven world rests is laid by the semiconductor industry. From cellphones to cars, all are powered by these tiny components, being part of a big number of electronic devices. Given the elaborate complexity of this space, we have condensed it into one article that presents the semiconductor value chain and its major players.
Semiconductor Equipment Manufacturers
Specialized semiconductor equipment manufacturers design, manufacture, and market machinery and tools that are essential to the production of semiconductors. This equipment has significance for fabrication and testing of semiconductor devices such as transistors, capacitors, and integrated circuits. They are very important with the continuous advancement of new technologies in the semiconductor industry; they are playing the leading role in bringing about newer technologies enhanced for efficiency. Their functions hence serve as the basis for miniaturization and performance enhancement in electronic devices involved in everyday human life. Examples are ASML, Lam Research, Tokyo Electron, KLA.
Electronic Design Automation
These companies deal with Electronic Design Automation where they provide software tools, techniques, and methodologies for designing and producing electronic systems which include from integrated circuits to printed circuit boards. The tools help enable engineers and designers visualize, simulate, and analyze the performance of electronic circuits before the actual manufacturing takes place. Examples are Synopsys, Mentor Graphics, ANSYS.
Fabless Companies
Fabless semiconductor companies focus on the design and development of semiconductor chips, but they don’t have their own manufacturing facilities or foundries to produce the physical chips. Instead, they outsource the actual production to specialized foundry companies as mentioned above. By operating without in-house manufacturing operations, fabless companies can reduce capital expenditures and concentrate on chip design and innovation. Examples are Qualcomm, Broadcom, Advanced Micro Devices, MediaTek.
Foundry Companies
Foundry firms manufacture chips for design companies. Rather than designing their own semiconductors, such design companies sell their designs to foundries, which are then turned into physical chips. Therefore, foundries serve as the ‘factories’ to the semiconductor world. As electronics have tailor-made rapidly and become very complex in their chip designs, foundries have grown into a vital component of the technology supply chain for efficient production without the hassle of manufacturing facilities. Examples are Samsung Electronics, GlobalFoundries, United Microelectronics Corporation (UMC).
Integrated Device Manufacturers (IDMs)
IDMs are those companies which carry out both the design and also the production of chips under their proprietary roof. These companies, unlike fabless companies, own and operate their manufacturing facilities, which are the fabs, and take care of the chips from design to fabrication. With this integration, they have better control over production, quality assurance, and supply chain dynamics. Moreover, according to industry experts, faster iterations, potential cost savings, and a more synchronized approach to innovation and production can be achieved by having both design and manufacturing under one roof. Examples are Texas Instruments, Samsung Electronics, Infineon.
Outsourced Semiconductor Assembly and Test
They provide third-party packaging and testing services for semiconductor manufacturers. After chips have been made, they must be packaged in such a way that they can be inserted into devices and tested. Instead of taking care of these steps in-house, semiconductor manufacturers often prefer to outsource this entire post-manufacturing process to specialized companies.
The semiconductor industry has an important pan onto which the economy can develop, drive technological innovation, and provide protection. Its applications are critical to several sectors, such as automotive, healthcare, communications. Numerous challenges, from semiconductor value chain vulnerabilities to environmental risks, geopolitical tensions, and technological threats.
