By Tanaz Buhariwalla
The semiconductor industry, which emerged around 1960, has undergone a remarkable evolution, transforming into a dynamic realm of innovation. Initially, it began as an emerging venture, but over the decades, it has burgeoned into a cornerstone of modern existence. The industry’s growth and transformation have been characterized by continuous technological advancements, shaping the landscape of electronics and influencing various aspects of our daily lives. From the early days of transistor development to the current era of complex integrated circuits, the semiconductor industry stands as a testament to ongoing progress and plays a pivotal role in driving innovation and technological breakthroughs.
Continuous Growth amidst Cyclical Swings:
The semiconductor industry operates in a unique paradigm, characterized by cyclical patterns and high volatility. The demand for constant price-performance improvement is a driving force behind its perpetual evolution. Recognized as a key driver and technology enabler in the electronics value chain, the industry is dominated by major players like Intel (USA), TSMC (Taiwan), and Samsung (South Korea). The prohibitive cost of establishing foundries acts as a barrier to new entrants.
Ireland’s Semiconductor Saga:
Ireland’s semiconductor journey commenced in 1976 when Analog Devices set up its manufacturing center. Over the years, Ireland has emerged as a hub for electronics talent, design, and manufacturing. Noteworthy investments by Analog Devices and Intel, among others, underscore Ireland’s significance in the global semiconductor landscape.
Global Turbulence and Rising Aspirations:
The industry is poised to reach $1 trillion by 2030. This despite the turbulence witnessed in recent years in the semiconductor industry, marked by geopolitical challenges, component shortages, and increased investments in emerging technologies. Countries like the EU and India are actively creating ecosystems to cope with the shortage and meet escalating demand.
Global Collaborations for a Resilient Supply Chain:
The EU’s Chips Act, aimed at increasing the region’s chip production share, and India’s ambition to become a semiconductor superpower highlight the global efforts to fortify the semiconductor supply chain. The United States has pledged support for building a resilient global semiconductor supply chain, with a strategic focus on partnerships with nations like India.
Challenges Ahead:
As countries endeavor to build their semiconductor industries, challenges loom large. Increasing capacity in wafer fabs construction, fitting out, and operation, are all specialized tasks that are time and resource intensive. The scarcity of electronic engineering talent globally poses a significant hurdle. Additionally, the resource-intensive nature of the industry, requiring land, materials, water, and energy in substantial quantities, presents sustainability challenges.
Ireland’s Competitive Edge:
Ireland’s success in attracting foreign direct investment is commendable, yet the competition is intensifying. The need to upgrade the country’s carrying capacity, maintain a strong track record, and invest in RD&I to contribute to the broader semiconductor ecosystem is imperative for sustained growth.
Fostering Innovation and Collaboration:
Universities in Ireland play a pivotal role in fostering innovation and contributing to the semiconductor ecosystem. Initiatives like the microelectronics center (MCCI) and collaborations under the Important Projects of Common European Interest framework demonstrate the commitment to early-stage research and cross-border collaboration.
As the semiconductor industry hurtles toward the trillion-dollar mark, nations are navigating uncharted waters. Collaboration, innovation, and strategic investments will be key in overcoming challenges and ensuring a robust, globally interconnected semiconductor landscape. Ireland’s journey, with its ups and downs, serves as a microcosm of the industry’s global odyssey. In this ever-evolving technological frontier, adaptability and collaboration will be the guiding beacons for sustained success.
The author is India Director, IDA Ireland
