Addressing supply chain challenges with custom semiconductors

Under the dual pressures of competition and innovation, enterprises are consuming more and more data, but the capacity of wireless spectrum will not grow any more. The Internet of Things, autonomous vehicles, and 5G and upcoming 6G networks already create huge demands for high-speed data. In addition to this, new applications that have not yet been invented will require not only greater bandwidth in the future, but also the use of advanced semiconductors to support these new technologies. How can technology companies meet the demand for innovation, given the challenges posed by supply chain instability in recent years?

Today's technology is becoming more and more complex. Enterprises must strive to be the first to enter the market while accelerating technology development and reducing development manpower investment. Cellular power amplifiers (PAs), which we considered simple components in the past, have now become complex integrated modules, with 1,500 different nodes requiring simulation and testing at every turn. What is driving product complexity across industries? 

Addressing supply chain challenges with custom semiconductors

Global digital transformation 

Everything around us is undergoing or has completed digital transformation. Twenty years ago, the estimated amount of global data storage was over 50 EB; today, this number has increased 140 times to 7,000 EB. More than 1,000 petabytes (one million terabytes) of data are generated around the world every day. With the continuous emergence of big data and new ideas, various usage scenarios have been significantly improved, and various new devices and new business models have emerged, bringing more business value and personal value. McKinsey estimated five years ago that although digital transformation has penetrated deeply into the technology, media and retail industries, only 40% of companies have truly achieved digitalization. Today, the proportion of digitalization in the business sector has increased to 65%. This huge growth in just a few years means we have a lot of data to move over the network, creating a need for higher throughput and lower latency, even after taking into account the benefits of the cloud. 

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These changes are far from over. After adopting distributed processing, "app (application)" mainly relies on large-scale data centers to bear heavy processing loads, which also profoundly changes the way applications work. Many technologies are now available to support our immediate needs, such as instant speech recognition, real-time translation, or turn-by-turn navigation. Customized chips and computing engines can process more data at faster speeds, and the use cases and value of using artificial intelligence (AI) and machine learning (ML) to control complex systems are also increasing. 

Meeting Semiconductor Needs  

Demand from new technologies such as silicon photonics, millimeter wave (mmWave) and high-power devices has prompted planning of new semiconductor manufacturing facilities (fabs) around the world. The purpose of this move is to build sufficient capacity to develop these emerging technologies and solve the chip shortage problem that occurred during the epidemic. With chip supply chain shortages expected to last into 2024, manufacturers will also continue to contend with supply chain risks. 

There was a time when most fab utilization rates were around 80%. However, supply chain disruptions that have occurred over the past few years have reduced the predictability of supplier channels and deliveries. Therefore, to ensure greater flexibility in manufacturing processes and supply chains, organizations should prioritize partnerships with semiconductor manufacturers to gain access to technologies they lack themselves, or invest in developing their own custom design and manufacturing capabilities. 

Accelerate innovation  

Meeting the challenges posed by future technological innovations will require not only building manufacturing capabilities but also engineering breakthroughs in test and measurement processes. The use of custom-designed semiconductors can help achieve such breakthroughs, creating new measurement systems to test use cases that require greater spectrum and bandwidth. 

Additionally, building a custom chipset can help alleviate supply chain issues. In the early days of the COVID-19 pandemic, delivery times for some suppliers extended to 50 weeks or even longer. Companies using their own semiconductor technology have the ability to better manage product flows and protect shipments from adverse external circumstances. 

To stay ahead in today's challenging technology and supply chain environment, we need to build strong partnerships in the right ecosystems to drive the development of custom semiconductors and help create a more innovative ecosystem. Sustain the future.