Engineering 5G innovation and beyond with advanced substrates

FOR almost 40 years, the semiconductor industry has been governed by Moore's Law which states that the number of transistors on an integrated chip doubles every two years.

As the development of ever-smaller chips tests the limits of what is physically possible, engineered substrates produced by combining layers of different materials on an atomic level can provide a way to accelerate and circumvent the limitations of Moore's Law.

The bonding of different materials enables the production of wafers which address the industry's criteria for power efficiency, higher performance, optimised chip area, lower cost, quicker time-to-market and increasingly, environmental sustainability.

In our quest to develop a modern, technologically advanced society, we are arriving at a delicate and critical juncture. On the one hand, we depend on technology to fuel growth and enjoy the conveniences of modern living, while on the other hand, we also need to protect the environment, manage climate change, achieve energy efficiency and attain health and social security.

The opposing demands are sowing the seeds for the germination of four new economies to cope with these challenges. These are: digital, longevity, net-zero, and sharing.

These four new economies are setting unprecedented requirements and challenges for more connectivity, intelligence and energy efficiency. This gives rise to three megatrends that will drive the demand for semiconductors in the coming years and double the size of the entire semiconductor market in this decade.

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The first megatrend is the progressive adoption of 5G. With increasing digitalisation, 5G is becoming the prime communications platform which connects everything, everywhere and at ultra-high speeds.

The demand for the soon-to-be ubiquitous 5G-enabled smartphones is expected to increase by eight times. We estimate the demand to hit 1.6 billion devices a year by 2030. But smartphones represent only the first wave of the 5G deployment, which will be followed by the mass adoption in many other domains and applications including Industry 4.0, fully autonomous driving, healthcare and education. 5G is a motor for accelerated innovation and will provide enormous opportunities for many industries for the next ten years.

5G's high speed, low latency and massive connectivity will fuel the rise of the second megatrend which is the proliferation of connected, smart devices. The trend towards having more energy-efficient and powerful devices leverages the convergence of artificial intelligence (AI) with edge computing to place the capabilities of supercomputers in users' palms.

The emergence of ever-smarter edge computing devices requires more semiconductor content to support the multitude of functions. For example, 3D image sensing is supplanting 2D and allows IoT (Internet of Things) devices to recognise object shapes, positions and motions.

INCREASING DEMAND FOR AI AND IOT

With this depth of information and computing, new human-machine interactions like gesture recognition and immersive experiences with virtual and augmented reality will be introduced. By 2030, it is estimated that the demand for AI-powered IoT devices with integrated machine learning capabilities will increase by 150 times to 2.6 billion units a year.

The third megatrend is the revolution in the automobile industry. Vehicles are becoming smarter and more environmentally sustainable due to the evolving trend of higher connectivity, autonomous driving, shared usage and electrification. The International Energy Agency estimates that more than 45 million smart electric vehicles per year will be produced globally by 2030 as compared to the 3.2 million units last year.

The sheer sophistication and complexity of the vehicles of the near future will reinforce one fact - they will need a pervasive, reliable and secure 5G network in order to function optimally.

All the visions of connected, smart, electric vehicles are well and good. Except that they may take longer than expected to materialise, courtesy of the prevailing global chip shortage which has been plaguing the automotive industry since the third quarter of 2020. The diversion of chip supplies to urgently meet the automotive industry's demand has further exacerbated the situation by creating a ripple effect, which has disrupted other industries that also rely heavily on timely chip deliveries.

In order to avoid unanticipated spikes or slumps in chip demand, it is critical for chip producers and their ecosystem partners and end-user customers to be more closely engaged. This calls for all players to embrace and join hands with other parties up and down the value chain, including those outside their normal scope of engagements.

Many of us would be familiar with the saying "If we fail to plan, we are planning to fail". Having long-term, end-to-end visibility and commitments of the entire value chain can remove many ambiguities and forestall any potential disruption to the industry. By bridging the ecosystem and understanding their ultimate requirements and challenges, we can develop innovative materials through mutual commitments which drive the end-customers' success.

While solutions to the global chip shortage are being worked out, the industry must also start engaging with other verticals beyond the obvious automotive sector. With the rapid development of new digital technologies like 5G, AI and robotics among others, it is imperative for the semiconductor industry and the new verticals to engage with each other and learn from each other now.

We must be practical to realise that the combination of rapid transformation, complexity of leading and bleeding edge technologies, and the high quantum of investments needed means no single company in the semiconductor space can deliver a full end-to-end solution.

With the global semiconductor market expected to expand from about US$500 billion in 2020 to over US$1 trillion by 2030, and with new technological applications coming onstream, the semiconductor ecosystems across all regions must swiftly join hands to catalyse the development of next-generation semiconductor materials.

A SUNRISE INDUSTRY

For instance, Soitec's ongoing research and development collaborations with leading European institutions such as CEA-Leti, Imec and Fraunhofer Institute, as well as A*Star and NUS in Singapore, can provide a vibrant, dynamic platform for other R&D institutions to join our efforts to innovate and produce more advanced engineered substrates and create win-win constellations for all of us.

Globally, the ongoing 5G launch is a sunrise industry which will herald the development of transformative applications that can redefine the way governments, societies and businesses operate. Just as 4G boosted e-commerce and launched innovative business models like Amazon, Netflix, Airbnb, Uber, among others, 5G will usher in exciting and disruptive applications and business models, some of which currently exist only as imagination in the minds of their creators.

With accelerated digitalisation brought about by the global pandemic, the increasing adoption of 5G and the exponential growth of connected, smart devices and the cloud, we forecast the addressable market for engineered wafers to grow by two and a half, from three million to seven million wafers a year by 2026.

This places Soitec in a sweet spot to capture the growth in the market. We have earmarked about S$440 million to scale up our operations at our Pasir Ris plant to manufacture one million wafers per year in the near future.

Beyond 5G, we are forging ahead to implement advanced production processes and new materials to create innovative engineered substrates with the view of supporting the growth trajectory of new technologies such as quantum computing and 6G.

These measures mark our commitment towards investing in innovation and operations at our headquarters in France and our plant in Singapore, strengthening our global customer intimacy, driving the sustainability in electronics and its applications and thus anchoring Singapore again as a semiconductor hub for Asia.

• The writer is chief executive officer of Soitec.