Chip and Semiconductor Manufacturing
Our everyday electronic devices, such as smartphones, computers, and automotive systems, are powered by advanced technologies. At the core of these technologies are microchips, which are the smallest yet most sophisticated components. These microchips, often referred to as chips or semiconductors, are responsible for delivering the immense power that drives our devices.
To create these powerful microchips, the chipmaking industry constantly pushes the boundaries of technology. Their goal is to develop increasingly energy-efficient chips, which would result in lighter and more efficient electronic devices. These chips are crucial in the rapid advancement of electronic technology.
However, producing chips is far from a simple task. It involves intricate steps and requires expensive precision instruments. Imagine the complexity of making a chip the size of a fingernail. The process demands careful attention and expertise.
Chip and Semiconductor Manufacturing Industry
ASML specializes in the development and manufacture of photolithography machines used to produce computer chips. The rapid growth of ASML will be driven by the desire of some countries to bring chip manufacturing onshore and reduce dependence on other countries because 72% of the world's chips are currently manufactured in Asian countries. As of 2023, ASML is the only supplier in the world of extreme ultraviolet lithography (EUV) lithography machines used to manufacture the most advanced chips.
The EUV lithography machine is ASML's most advanced chip processing machine, and its cost is about $150 million. Its purpose is to create the finest details on microchips, and its achievable precision is its greatest advantage, being more than ten times smaller than any lithography machine currently on the market. It works by projecting circuit patterns onto silicon wafers using an extremely short wavelength (13.5 nanometers), EUV lithography machines can pack more transistors onto a single chip, allowing for cost-effective mass production. The main steps of chip manufacturing are deposition, photoresist coating, lithography, etching, and ion implantation. This also reflects the necessity of EUV lithography machines.
The Main Steps in Manufacture of Chips and Semiconductors
- Deposition
- Photoresist Coating
- Lithography
- Etch
- Ion Implantation
- Packaging
The development of the chip production industry
| Country | Main Companies and Industries | Funds Invested by the Company | Production as a Percentage |
|---|---|---|---|
| South Korea | Samsung | $45 billion | 28% |
| Taiwan | MediaTek | $22.54 billion | 22% |
| Japan | Sony | $85.51 billion | 16% |
| China | Shenzen Goodix Technology | $10.52 billion | 12% |
| America | Intel | $286.83 billion | 11% |
| Europe | STMicroelectronics | $20.73 billion | 3% |
| Other | Unknown | Unknown | 7% |
Governments and companies across the entire semiconductor value chain have had to navigate changing demands, supply chain imbalances, and geopolitical factors in recent times. As a result, action plans and policies have had to be established to safeguard the supply of semiconductors. Due to its importance, the semiconductor industry is extensive and competitive: in 2022, global semiconductor sales reached 618 billion U.S. dollars, a rise of more than 30 percent in just two years. However, with a deteriorating global economy and weakening demand from consumer-driven markets, the semiconductor industry must overcome new challenges as it faces a decline in 2023.
Chip Policy
Semiconductors play a vital role in the functionality of modern electronic devices. However, a massive portion of these semiconductors are currently imported from Asia, rather than being domestically produced in the United States. Due to concerns surrounding dependence on foreign sources and the volatility of international relationships, the US Congress acted in July 2022 by passing the Chips and Science Act. This legislation allocates an additional $5 billion in funding to bolster the semiconductor manufacturing industry within the country, and to advance research, development, and production of semiconductors within the United States.
Sources: CNN Business