Semiconductors: The critical industry most people don’t think about

They’re the unsung heroes in daily life around the world – and today, we want to celebrate semiconductors. Because they deserve a little bit of attention. 

In simple terms, a semiconductor is a substance with particular electrical properties, through which it acts as a foundational technology for almost every type of electronic device, including computers. Semiconductors conduct electricity only under certain, specific conditions – and not under any other conditions. 

They’re the tiny chips that make our electronic devices work. And without them, the modern world as we know it would come to a standstill. 

Semiconductors have enabled all the major technological advances of our time

From healthcare to clean energy; fintech to transportation; communications to AI; semiconductors are there enabling every technological development we make. They play a central role in so many aspects of our lives that at this point, it’s impossible to extricate our day-to-day tasks and social systems from semiconductors. 

And yet, most people don’t know about them, or rarely think about them. 

They’re divided into two types: 

• Intrinsic semiconductors: these are pure semiconductors, without any impurity or ‘doping’.
• Extrinsic semiconductors: these are created by adding impurity to the semiconductor substance (also called ‘doping’), in order to vary its structural, optical, and electrical properties. 

The semiconductor industry: Who are the key players?

With more than 73,000 employees, and over USD $75 billion revenue in 2022, Taiwan Semiconductor Manufacturing company (TSMC) holds a 60% market share. 

Increasingly, other countries are competing to control the semiconductor market – but supported by Taiwan’s government, TSMC is holding firm. 

Research by McKinsey estimates that the global semiconductor industry will reach $1 trillion by 2030, as the world’s data needs continue to increase. And both the EU and the US have implemented policies to boost production: 

• The European Chips Act is a policy framework specifically developed to drive growth in the semiconductor industry in Europe. By increasing research and development, the framework aims to cultivate innovation and enable technical advancements, both in the design of semiconductors themselves, and within the manufacturing process. It also calls for the establishment of a European Semiconductor Alliance – which would drive collaboration and knowledge sharing between manufacturers, technologists, research institutions and governments in order to advance semiconductor design.
• The US CHIPS and Science Act has allocated $52 billion worth of federal subsidies for research, development, and production of semiconductors. It’s a legislative initiative with the goal of strengthening the nation’s position in the global semiconductor industry, and grant programs will increase semiconductor manufacturing within America. There’s also a focus on attracting and training talent to ensure the domestic semiconductor industry is well-equipped with skilled professionals in the years to come.

China, which accounted for about 9% of the global semiconductor market in 2020 (up from 3.8% just five years earlier), is also working to stay competitive in this fast-growing industry. The country’s government has implemented financial incentives (including tax breaks and low-interest loans) to boost investment into semiconductor research and development, as well as manufacturing. And China has established national semiconductor research institutes and innovation hubs – driving collaboration and technological development. 

Major semiconductor manufacturers in China include SMIC, Yangtze Memory Technologies, and HiSilicon. They’re all expanding their production capacities alongside increased technological innovation – with aims to create semiconductor chips that can compete in a global market. 

What would happen if all semiconductors stopped working? 

To highlight how crucial this technology is, we can consider the impact if semiconductors weren’t functioning: 

• Our personal electronics wouldn’t work: smartphones, tablets, computers, TVs, video games, radios – all of it.
• Transportation would be affected: aeroplanes, trains, cars, and other vehicles rely on semiconductors in order to operate.
• Healthcare equipment wouldn’t work: including X-ray machines, MRI machines, and many other diagnostic and treatment tools.
• Financial infrastructure wouldn’t function: from digital banks to traditional ATMs, banking and financial services would come to a standstill.
• The global economy would suffer immensely: because so much of the world’s economy is dependent on devices that require semiconductors.

In short, the impact would be catastrophic. Semiconductors are tiny chips that make the modern world go round – and that makes this a critical industry.