Intel CEO Pat Gelsinger: Semiconductors are everywhere

Intel continues to lead the “Golden Age of Semiconductors” and play a role in creating the world’s connected industry

Key points:

• As the demand for massive computing power grows, we are entering a new golden age of semiconductors.

• Semiconductors are an area of ​​extremely high demand, and Intel is one of the few companies that can provide cutting-edge semiconductors.

• The world’s dependence on semiconductors requires a more balanced, resilient supply chain, and Intel is doing all it can to help solve this problem.

• An open ecosystem can unleash innovation and allow computing to develop in a crowd-innovative environment. Compared with closed, proprietary solutions, an open ecosystem will ultimately win.

  
  

By Pat Kissinger

CEO, Intel Corporation

Semiconductors are everywhere

More than a decade after Marc Andreessen declared that “software is eating the world,” we have entered an era where software and hardware will work together to lead the operation of human society. As technology becomes increasingly central to every aspect of human life, the world is becoming digital.

The rapid development of cloud, data networks and smartphones has transformed industries around the world. All of these technological developments are based on the large-scale development and cost-effective deployment of semiconductor technology.

The outbreak of the COVID-19 pandemic has ignited the flame of this digital transformation, disrupting timelines and plans, and forcing innovation in digital products. Semiconductors provide society with the ability to work remotely, stay connected with friends and family, provide virtual education, and enhance healthcare. They have fast-tracked scientific research, including mapping the intricate molecular landscape of the novel coronavirus.

Semiconductors are advancing at a rapid pace, transforming key industries including education, finance, manufacturing, medicine, transportation and defense. All of this has led to unprecedented demand for chips, which has been further exacerbated by disruptions to the global supply chain.

We are at the cusp of a digital renaissance

Clearly, semiconductors are the backbone of the global economy and are essential to sustaining our lives in the “new normal.” What does this mean for the semiconductor industry?

According to Gartner, the semiconductor market will exceed $500 billion for the first time in 2021, and semiconductor technology is driving the transformation of almost all industries. With the never-ending growth in demand for computing power, the semiconductor market is expected to double to $1 trillion by the end of this century. We believe that revenue will grow faster in the cutting-edge field, that is, the most advanced semiconductor process nodes, which is also where I think the demand is the greatest. In fact, I see that the revenue growth rate of backward nodes is only one-fifth of that of advanced nodes.

As every company becomes a technology company, we are facing a once-in-a-lifetime opportunity for Intel and the semiconductor industry to accelerate transformation. In this changing environment, I am confident that Intel can become a world-class semiconductor company and usher in a new era of innovation and technological leadership.

Ushering in the era of Super Moore's Law

Advanced semiconductors are enabling new levels of human achievement, thanks to what I call the “four technological superpowers,” which in turn are triggering an explosion in demand for semiconductors.

1. Ubiquitous computing allows people to interact with ever-changing technology everywhere.

2. From cloud to edge infrastructure, it provides a scalable solution to process massive amounts of data while meeting application requirements for low latency and high bandwidth.

3. Ubiquitous connectivity allows technology to connect everyone and everything.

4. AI brings intelligence to all of this and will continue to infuse all forms of computing through standards-based, developer-friendly, scalable tools and technologies.

Since Intel was founded, we have thrived on and relentlessly pursued Moore's Law, the semiconductor creation and innovation it describes. Moore's Law has provided the technological foundation for the greatest period of innovation and wealth creation in human history, and we have all benefited from it.

These “super powers” ​​have driven exponential growth in the world’s demand for computing, in a way that size is inversely proportional to power. That’s Moore’s Law in a nutshell.

The industry currently needs solutions with lower latency, higher density, higher energy efficiency and Z-level computing (1Z=1021, 10 trillion level). This will require a lot of R&D investment in new transistor design, extreme ultraviolet lithography (EUV) tools, advanced packaging and precision manufacturing to enter the angstrom era of semiconductors. As the guardian of Moore's Law, we expect to quickly advance the development curve of Moore's Law.

I am proud of the progress the Intel team has made in delivering next-generation semiconductor technology. Our innovations and rich solutions in materials, transistor structures and circuit topologies enable us to continue to deliver the performance, power and cost requirements for multiple generations of semiconductors at scale.

In addition, advanced packaging technologies such as Intel's EMIB and Foveros have ushered in a new era of chip manufacturing, expanding from being able to design on a single chip to being able to mix and match in flexible system-level packaging.

A handful of companies, including Intel, are driving cutting-edge progress

The need for the entire industry to shift from backward nodes to advanced nodes remains. Take the automotive industry as an example, which is currently undergoing a profound and significant transformation. As cars become smarter, more efficient, and safer than ever before, all thanks to semiconductors, the automotive industry must get rid of its extreme dependence on backward nodes and turn to more modern technologies to solve supply chain problems by expanding production capacity. We expect that by the end of this century, semiconductor materials in high-end cars will increase fivefold, and the revenue of the automotive semiconductor industry will double to $115 billion. We have also seen similar development trends in healthcare, retail, banking, travel and other fields. The power of digitalization is driving new changes and disruptions.

Applications across all industries, such as graphics and gaming, networking and data processing, require enhanced performance, better efficiency and lower power, and these improvements require cutting-edge innovation. In the future, we can provide petaflops of computing power and petabytes of data to every person on the planet in 1 millisecond.

As we enter the second half of this decade, the number of advanced lithography wafers produced each year is expected to double and continue to grow. By the end of this decade, more than 40% of semiconductor revenues will come from these advanced nodes. Intel is one of the very few companies that can make the leap to extreme ultraviolet lithography (EUV) technology and deliver at successive advanced nodes.

Production capacity is the key to success or failure

The unprecedented industry-wide chip shortage highlights the need for the ability to manufacture more semiconductors and a more diverse, secure and balanced supply chain. When our industry can deliver products around the world, we reduce the risk of additional semiconductor supply chain failures and increase the resilience of the global technology infrastructure.

While the industry has been working tirelessly to ensure there is enough semiconductor wafer production capacity to meet projected demand, we expect supply constraints to persist through at least 2023, with tighter supplies of older technology nodes and fab equipment in the near term. In the second half of this decade, as Intel and the rest of the industry begin building more fabs, supply constraints will improve and be able to meet the expected doubling of demand and the need to migrate to more modern nodes.

But it’s not just wafers that are constrained. The digital renaissance has put tremendous pressure on the global supply chain, whether it’s Wi-Fi modules, substrates, panels or any other critical component. The entire supply ecosystem needs to be strengthened to ensure that no individual bottlenecks limit industry development. This is why Intel is driving collaboration across the entire supply chain from top to bottom, not only with our suppliers, but also with our suppliers’ suppliers and Intel’s customers.

Looking ahead, as part of Intel's IDM 2.0 strategy, our investment in leading capacity in the United States and Europe is targeting the next wave of innovation driven by four super technology forces. Last month, Intel announced an investment of more than $20 billion to build two new cutting-edge chip factories in Ohio, the heart of the new Silicon Valley in the United States. This investment opens up the entire region to help increase production to meet the growing demand for advanced semiconductors and power Intel's new generation of innovative products. This will help build a more resilient supply chain while ensuring stable access to semiconductors in the coming years.

Only by working together can we usher in a new era of innovation

More than half a century has passed since semiconductors began shipping commercially. Today, semiconductors are the foundation of many of the world’s innovations, and the market for semiconductor technology is expected to grow to $650 billion this year. However, we believe that the “Golden Age of Semiconductors” has just begun. Just as Intel was founded, we will continue to lead the next era of semiconductors and play a role in creating a globally connected industry.