Ajit Manocha, Global President and CEO of SEMI, the International Semiconductor Industry Association, stated that even though major chip economies still heavily rely on each other, more semiconductor "hubs" are needed to ensure the resilience of the supply chain.
Ajit Manocha stated that despite the recent economic slowdown, he still believes the industry has the potential to reach the $1 trillion mark within eight years. At the time of his remarks, major economies such as the United States, Europe, and Japan are turning to localized chip production.
Ajit Manocha has worked in the semiconductor industry for 40 years, serving as the CEO of Gexin and holding multiple executive positions at memory chip manufacturer Spansion and Philips Semiconductors (now NXP).
Ajit Manocha said, "Many countries/regions around the world are starting to consider chip hegemony, and if more hubs are ultimately created, it would actually be a good thing for the resilience of the supply chain. The pandemic, climate change, and geopolitics have indeed shown the necessity of semiconductors." He added that a few years ago, chip shortages were very severe and disrupted many industries. He pointed out that the preparation time for producing cars was as long as two years, while it took him three months to repair the broken sensor in the refrigerator himself.
However, even if the world does develop more semiconductor centers, the supply chain will continue to rely on links from multiple countries/regions. Nowadays, semiconductor production is no longer done by one country/region. We actually rely on five or six countries/regions. For example, we rely on EUV (extreme ultraviolet) lithography equipment from the Netherlands, substrates and high-quality materials from Japan and Europe, and some inert gases from conflict prone regions (referring to Ukraine). We are very dependent on each other, and this dependence relationship will not change in the short term
Cross cooperation between suppliers will also increase to address challenges such as energy consumption and cooling technology in artificial intelligence technology. This requires more collaboration among ecosystem members to research new materials, substrates, and packaging technologies, not only from suppliers but also from academia, "he said.
Ajit Manocha stated that despite the severe recession in the semiconductor industry caused by the global economic slowdown last year, he is optimistic that the semiconductor industry will become a $1 trillion industry within 6 to 8 years and a $2 trillion industry in 8 to 10 years.
It took us 70 years to reach a market size of $600 billion, and due to AI and the Internet of Things, it will reach $1 trillion in the next seven to eight years, "Ajit Manocha said." The next wave will be quantum. I think it will double from $1 trillion to $2 trillion in 10 years
He said that in the first 30 years of his career, the chip industry was more cyclical, with steeper upward and downward cycles. Now, the recession period has become shorter and shallower as there are more applications driving demand for various types of chips. We used to have very few killer applications, but now the situation is very different. These applications are driven by artificial intelligence, the Internet of Things, and quantum computing
SEMI predicts that although automotive and industrial applications remain sluggish, the chip industry will grow by 20% driven by the recovery of storage and AI related demand. New applications or technologies such as edge AI, quantum computing, and silicon photonics are all in the high double-digit growth range.
