Page 10 - ChipScale_May-June_2020-digital

MARKET UPDATE

The real third wave of semiconductor market

growth and some packaging challenges

By Asif Chowdhury [UTAC Group]
A t a b o u t 0 . 5 % , t h e 5-year CAGRs north of 20% during this causing prices of many of the novel IoT

semiconductor industry
end products to remain outside the reach
growth phase. Then the market went
is a small percentage of
com bust in 2000. The next growth
The latest hype in the semiconductor
global GDP. Howeve r, through a down cycle due to the Dot- of mass consumers.
semiconductor devices play a very large spurt, or the second wave of growth, was world is 5G. There is another round of
role in advancement and growth of almost driven by the advent and proliferation consensus building around the potential
all other market sectors and industries. of mobile handsets and tablets from the of 5G technology as the next big growth
Semiconductors are an integral part of early 2000s to about 2008, just before driver for the semiconductor market.
our everyday lives. In the last 50 years, the last financial crash (2008). Since This time though, the hype is likely
this niche market has grown from almost then, the market has rarely seen any to become reality, not only because of
nothing to about a $500B market ushering double-digit growth year-over-year. In the potential of proliferation of 5G, but
in new technologies and innovations that the last decade, there wasn’t a single significant improvement of some other
have not only significantly altered and 5-year CAGR with double-digit growth. key fundamental technologies such as
improved almost all aspects of our lives, As the industry has matured, year- artificial intelligence (AI), virtual reality
but also propelled the growth of many over-year growth has naturally become (VR), augmented reality (AR), and cloud
other markets. [Note: Forecasts in this moderate. Still, there has been continued computing. As shown in Figure 2, along
article were made before the full potential discussion among the semiconductor with the growth of 5G, the improvement
market downside of the COVID-19 market pundits as to what will drive the of these key technologies will likely
pandemic were known.] next double-digit growth spurt for the
Figure 1 shows 5-year compound semiconductor market, if anything. There
annual growth rates (CAGRs) for the were a good few years during the last
semiconductor market from 1995 decade when it was widely believed that
through 2019. While the semiconductor the Internet of Things (IoT) would be the
industry has steadily grown since its next double-digit growth driver for the
inception, there were a couple of periods semiconductor market. However, despite
during which the industry saw waves of all the hype around IoT, that expected
double-digit growth. The first wave was growth didn’t take place for various
in the nineties driven by the significant reasons. Perhaps one of the key reasons is
growth in the personal computer (PC) because the price points for fundamental
and laptop markets. Figure 1 shows technologies remained relatively high

Figure 2: Development and convergence of
fundamental technologies likely to fuel growth for the
semiconductor market.

create a convergence that will usher
in the next-generation of electronics
products from true smart homes to full
autonomous vehicles.
In addition to the significant improvement
in the fundamental technologies discussed
above, another important phenomenon is
also likely to enable this convergence to
create and grow next-generation products.
Figure 1: 5-year rolling CAGR for IC markets from 1994 through 2019. SOURCE: IC Insights

8 8 Chip Scale Review May • June • 2020 [ChipScaleReview.com]