BY PETE SINGER, Editor-in-Chief

The semiconductor industry is changing in some big ways. Demand for PCs and mobile devices – once the main drivers of growth – has slowed. Gains from traditional scaling are harder to come by. Cost per transistor is now increasing. Consolidation is widespread up and down the supply chain, which may slow innovation. ITRS efforts have been abandoned.

Yet, despite this “maturing” of the industry – at least as we know it — opportunities abound. The Internet of Things (IoT) is set to explode, which will result in a demand for “things” such as sensors and actuators, but also cloud computing.

Earlier this year, Brian Krzanich, CEO of Intel, wrote about five core beliefs that he holds to be “undeniably true” for the future:

• The cloud is the most important trend shaping the future of the smart, connected world – and thus Intel’s future.
• The many “things” that make up the PC Client business and the Internet of Things are made much more valuable by their connection to the cloud.
• Memory and programmable solutions such as FPGAs will deliver entirely new classes of products for the data center and the Internet of Things.
• 5G will become the key technology for access to the cloud and as we move toward an always-connected world.
• Moore’s Law will continue to progress and Intel will continue to lead in delivering its true economic impact.

While it’s true that it’s difficult to forecast what the overall impact of the IoT movement will have on the semiconductor industry, or how big it will be. Speaking at The ConFab in June, Tom Caulfield, SVP and GM of Fab 8 at GLOBALFOUNDRIES, said the IoT opportunity represents
“magnitudes that are well beyond anything we’ve done before.” A recent McKenzie study estimates $50-75 billion dollars of additional semicon- ductor revenue in an industry that today is $350 billion.

IoT, cloud computing and 5G will result in increased demand for leading edge semiconductor technology, which in turn will create a demand for 7 and 5nm devices and beyond. Perhaps more importantly, there will be tremendous demand for a wider variety of solid state devices, including MEMS, LEDs, power electronics, biomedical devices, thin film batteries and photonics/plasmonics.

There will be a need to integrate these devices for the usual reasons: to improve performance, and reduce cost and size. This will lead to innovative new packaging strategies and better chip-package co-design tools. It will create a demand for new types of manufacturing equipment and materials. New business models and new approaches to collaboration will also be required.

In short, the semiconductor industry is going through some fundamental changes, but the future has never looked brighter. As Caulfield said at The ConFab, “The demand for silicon is going to grow in an incredible way. What we need to do in this industry, is what we’ve done all along. We’ve reinvented ourselves every 18 months to 2 years with Moore’s Law. Now we have to start reinventing ourselves in how we engage and collaborate together.”