[Agile Electronics Story] The Small and Delicate Electronics Industry's 'Big Brother' Semiconductor Part 2

[Asia Economy Reporter Ki-min Lee]‘Agile Electronics Stories’ is a column that keenly examines small details about electronic and mechanical products and devices. We kindly cover everything from hot new products frequently appearing in advertisements and news, nostalgic items, to puzzling products and industry terms and news, all with the heart of a beginner.

These days, our lives are undergoing rapid changes due to the spread of the novel coronavirus infection (COVID-19). Some companies are implementing remote work and refraining from scheduled gatherings. Sports, performances, and events are also being canceled as everyone is doing their best to overcome this situation.

The industrial landscape is also divided into before and after the COVID-19 pandemic. Various plans and strategies set at the beginning of the year are being revised, and some industries have halted factory operations due to confirmed cases, decreased customers, and supply chain issues. Because of this, the semiconductor industry, like other industries, is facing a challenging situation. However, companies are focusing on technology development and investment regardless of COVID-19.

This edition of ‘Agile Electronics Stories’ will look into semiconductor technology trends, industry conditions, and prospects.

Competing with Advanced Technology from Design to Process

Long-term demand for semiconductors is expected to accelerate further in line with industrial advancement. Non-memory (system) semiconductor products such as CPUs, application processors (APs), image sensors, and modem chips are increasing in demand because they analyze and process data not only for smartphones but also for automobiles, advanced home appliances, and medical bio sectors. For example, autonomous vehicles that recognize driving environments, assess risks, and plan routes without direct driver input; washing machines equipped with AI that learns customer usage habits and automatically adjusts preferences; and ultrasound devices that improve diagnostic accuracy using big data.

In semiconductors, the technology of foundries (semiconductor contract manufacturers) that fabricate the chips is as important as the technology of fabless design companies. Producing actual semiconductors according to nano-scale circuit diagrams requires advanced technology. The finer the complex circuits can be drawn, the higher the productivity per unit and the lower the cost.

[Image source=Yonhap News]

When light is projected using lithography equipment onto a wafer coated with photoresist and a mask with circuit patterns is placed, the circuit is drawn according to the photoresist pattern. The wavelength of the light from the lithography equipment must be short to draw fine circuits. In the past, argon fluoride (ArF) immersion equipment was used to etch circuits, but since circuit widths dropped below 10 nanometers, extreme ultraviolet (EUV) lithography equipment has been used.

The competition in fine process technology between Taiwan's TSMC and Samsung Electronics, the two leading foundry companies, is fierce. Since starting mass production of 7-nanometer products in 2018 and last year respectively, they have begun developing technology to mass-produce 5-nanometer products this year and 3-nanometer products in 2022. Additionally, existing developed semiconductors are continuously improved to enhance functions such as power efficiency.

128-layer 1Tb TLC NAND flash

Among memory semiconductors, 3D NAND flash, a non-volatile memory, is characterized by the number of layers. In the past, NAND flash used planar cells spread out flat, but as cell spacing narrowed, interference occurred and electron loss inside the device happened. Therefore, instead of spreading cells flat, they are stacked three-dimensionally to overcome the limits of fine processes.

However, stacking requires drilling plugs. As the number of layers increases to 32, 48, 72, 96 layers, and the depth grows, maintaining uniform thin film thickness and shape becomes difficult. Because of this, domestic and international semiconductor companies are researching stacking technologies for NAND flash cells or different methods of stacking cells.

COVID-19 Hits the Semiconductor Industry Just as It Was Ready… Gloomy Outlook

Originally, this year was expected to be the replacement cycle for semiconductors needed in data center servers, and with the establishment of 5G networks, demand and prices for semiconductors were forecasted to rise since last year. Accordingly, predictions of rising semiconductor prices continued. In fact, until February, before the global spread of COVID-19, the market conditions were favorable. According to market research firm DRAMeXchange, the fixed transaction price for DRAM (DDR4 8Gb), mainly used in personal computers (PCs), averaged $2.88 at the end of February, up 1.4% from the previous month. Server DRAM (32GB) prices also rose 6% to $115.5 compared to the previous month.

However, COVID-19 has cast a shadow not only over the automotive and home appliance industries but also the semiconductor industry. Market research firm IDC recently released a report titled 'Impact of COVID-19 on the Global Semiconductor Market Outlook,' predicting that in the worst case, global semiconductor sales could drop by 6-12% compared to last year. The 6% decrease in sales forecast translates to approximately $25.8 billion (about 32.4 trillion KRW).

This is related to reduced consumption in the US and Europe, leading to decreased production and demand for products from electronics companies such as smartphone manufacturers. DRAMeXchange also forecasted that if COVID-19 is not contained by the third quarter, "weak consumer demand will negatively affect electronics companies' inventory reduction, causing NAND flash memory prices to drop sharply."

Kim Ki-nam, Vice Chairman and CEO of Samsung Electronics, is speaking at the 51st Annual General Meeting of Shareholders of Samsung Electronics held at the Suwon Convention Center in Yeongtong-gu, Suwon-si, Gyeonggi-do on the morning of the 18th. Photo by Kang Jin-hyung, Suwon aymsdream@

Therefore, domestic semiconductor companies are devising strategies to minimize risks to withstand the COVID-19 situation. At the recent Samsung Electronics annual shareholders' meeting, Kim Ki-nam, Vice Chairman and CEO of Samsung Electronics' Device Solutions Division, expressed concerns about the spread of COVID-19, stating, "We are responding systematically and proactively to minimize global supply chain risks such as production and sales disruptions and impacts on partners."

Lee Seok-hee, CEO of SK Hynix, also reported at SK Hynix's 72nd annual shareholders' meeting, "This year, a moderate market recovery was expected due to eased inventory burdens at customers and increased demand for memory products, but external uncertainties are rising due to the spread of COVID-19." He added, "While prioritizing the safety of our members, we will continuously strengthen cost competitiveness and maximize asset efficiency to enhance SK Hynix's resilience."

This content was produced with the assistance of AI translation services.