Introduction
It is when they faced a chip shortage that they realized semiconductors are important. Two years down the lane, governments of various countries are making huge investments in developing their semiconductor industry. From design hubs to material providers to integrated device manufacturers, the semiconductor supply chain is intricate and crucial for the functioning of various industries.
We realize that semiconductors are involved in almost everything around us. While we talk about it, it’s important to understand how these chips get to us. A semiconductor supply chain runs from design hubs to material providers to integrated device manufacturers.
In this article, we explore the semiconductor ecosystem responsible for manufacturing these chips, detailing the involvement of various companies. We categorize companies based on their role in the supply chain to ensure a clear understanding.
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1. Fabless Chip Design
$AMD, $QCOM, $NVDA, $MRVL, $AVGO
These companies focus on the design aspect of chips and outsource the manufacturing process to foundries (discussed below).
Companies like AMD, Qualcomm, Nvidia, Marvell, and Broadcom specialize in designing advanced semiconductor chips that are crucial for computing, telecommunications, and artificial intelligence.
For example, AMD’s Ryzen and Radeon chips have been pivotal in driving high-performance computing.
Image Credits: Shay Baloor on X
Read More: 2 Trillion Dollar Company: What are 6 Keys to Nvidia Success – techovedas
2. Fabless Non-Chip Design
$IBM, $AAPL, $GOOGL, $TSLA, $MSFT, $META, $AMZN
Tech giants such as IBM, Apple, Google, Tesla, Microsoft, Meta, and Amazon are expanding into hardware by integrating chip design into their broader ecosystems. This allows them to create chips that are tailored to their needs, thereby increasing their competitive edge in the market.
Apple’s M1 chip, is a prime example of a custom-designed processor.
Image Credits: Shay Baloor on X
Read More:A New RISC-V Breakthrough Chip Merges CPU, GPU & AI into One – techovedas
3. IP & Design
$ARM, $SNPS, $CDNS
ARM, Synopsys, and Cadence are the architects of the semiconductor world, providing intellectual property (IP) and software tools that are essential for chip design. They support the industry by offering design licenses and the necessary tools for creating and testing chips.
ARM licenses its Cortex processors widely, making them a staple in the majority of mobile devices, thus highlighting the significance of IP in the semiconductor ecosystem.
Image Credits: Shay Baloor on X
4. Integrated Device Manufacturers
$TXN, $INTC, $MU, $ADI
Texas Instruments, Intel Corp, Micron, and Analog Devices are IDMs.
These companies handle both the design and manufacturing of semiconductors. This approach gives them control over the entire production process but involves higher capital expenditures and can present challenges in quickly adapting to market changes.
Intel is known for its IDM model i.e. it designs and fabricates the chips in its own premises.
Image Credits: Shay Baloor on X
Read More: Tesla to Unveil Robotaxi in August 2024: Your Next Ride Won’t Have a Driver – techovedas
5. Foundries
$TSM, $SSNLF, $GFS
TSMC, Samsung Electronics, Global Foundries and similar likes are dedicated to manufacturing chips designed by other companies. TSMC’s focus on production has led to significant economies of scale and technological dominance, making it an essential part of the fabless model and the broader semiconductor supply chain.
Source: Trendforce
Read More: 5 High Growth Stocks From the World of Semiconductors – techovedas
6. Equipments
$KLAC, $ASML, $LRCX, $AMAT
In the semiconductor industry, companies like KLA Corporation, ASML Holding, Lam Research Corporation and Applied Materials play a pivotal role as the providers of the sophisticated equipment required for chip manufacturing. Their contributions are not always in the limelight but are crucial to the production process.
Image Credits: Shay Baloor on X
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Conclusion
In conclusion, the semiconductor industry is a tapestry of specialized segments, each playing a crucial role in delivering the chips that power our digital age. From the design-focused fabless companies to the integrated device manufacturers and the foundries that bring these designs to life, each link in the supply chain is vital. The equipment providers enable the cutting-edge manufacturing processes, while IP firms supply the blueprints for innovation.
As governments and industries invest heavily in this sector, understanding the interconnected roles becomes crucial.
