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As the global semiconductor ecosystem continues to evolve, Tyndall’s Dr Giorgos Fagas explains the R&D needs for Ireland to ensure it stays in the game.
There has been a lot of movement in the semiconductor industry since the dreaded chip shortage dominated tech headlines over the last few years.
While many companies responded to this shortage by stockpiling chips, the global economy has entered a crunch period. Demand for certain chip-related products has died down and many businesses have tightened their spending, leading to a glut in the global market.
Despite this, many semiconductor manufacturers expect the market to recover later this year, while others continue to invest heavily to meet future demand. In fact, the semiconductor market is projected to grow from $590bn in 2021 to more than $1trn by 2030.
This will largely be driven by the wireless, computing and data storage, and automotive industries and in the future, intelligent connected devices will control autonomous connected cars, the energy grid and traffic management systems, as well as smart homes, factories and hospitals.
Not only has the sharp change in supply and demand brought semiconductors to the forefront of leaders’ minds, but the current geopolitical situation has also highlighted the significance of wafer-scale production and knowhow.
It has also triggered a number of measures and countermeasures of the most advanced semiconductor economies in the so-called ‘chip war’.
To help future-proof itself, the EU recently adopted its long-awaited Chips Act, and earlier this week, the Tyndall National Institute has called on Ireland’s Government to develop its own semiconductor strategy.
Dr Giorgos Fagas, who authored Tyndall’s position paper on the topic, told SiliconRepublic.com that Ireland is well positioned in the European and global semiconductor ecosystem thanks to its strong ICT industrial base and R&D excellence in the sector. “However, there are challenges to be addressed to maintain and strengthen Ireland’s position in the currently volatile environment and to exploit the opportunities in the sector,” he said.
‘Ireland presents a strong ICT cluster, hosting key players along the semiconductor value chain’
“Ireland needs to be able to grow its capacity to innovate by scaling and globalising its research and technology infrastructure. For example, a dedicated competence centre of scale would deliver prototyping pilot lines, design and testing facilities to create new value chains between the micro/nanoelectronics and photonics technology sector and its strong digital service, medical devices, biopharma and agri-food industries. This is the case for countries such as Belgium and Finland.”
Fagas highlighted another challenge for Ireland’s semiconductor industry: talent. The increased demand and investment means there is a “global hunt for skills” in the sector, such as semiconductor processing and manufacturing, digital and analog design, heterogeneous system design and formulation of innovative materials.
Earlier this year, SiliconRepublic.com spoke to University College Dublin’s Prof Peter Kennedy about this very concern. He said Ireland needs “a steady supply of electronic engineering graduates at master’s level and doctoral level” to hold onto its leadership in the space.
Research and development
Fagas said another challenge for building semiconductor sovereignty is investing in the research and development side of the house. “R&D expenditure accounts, on average, for around 20pc of sales, making semiconductors one of most research-intensive industries next to pharma and biotech,” he said.
“Capital expenditure is also very high. In the US alone, it has been exceeding 10pc of sales over the past two decades. However, it varies significantly across the value chain, with front-end manufacturing (foundries, IDMs), being the most capital-intensive part followed by the assembly and packaging, testing, equipment and chemicals segments.”
In terms of Ireland’s input in this area, its strengths lie in chip design, deep-tech, smart manufacturing and chip fabrication. Ireland hosts the only Intel fab in Europe with advanced node manufacturing capability.
Ireland is also home to Analog Devices in Limerick, which announced 250 additional jobs in its facility and an investment of €630m to triple the wafer capacity.
“Ireland is also a hub for advanced chip design, being home to significant fabless companies and having generated over the years a number of indigenous SMEs that attracted the attention of major semiconductor players,” said Fagas.
So what can Ireland do to ensure it stays ahead from an R&D perspective? Fagas said it should not be business as usual and the challenges cannot be solved by a single company, organisation or the Irish Government alone.
“A chips strategy for Ireland is needed with the ambitious target of more than doubling the size of the semiconductor industry in Ireland by 2030.”
To do this, Fagas said the semiconductor manufacturing and design activity in the country needs to be recognised as a separate discrete industry sector, with the establishment of a high-level group and a stakeholder alliance with a “whole-value-chain approach” to maximise opportunities.
He said there also needs to be a focus on creating a healthy future skills pipeline as well as national science funding and other R&D public funding streams into a national ‘Chips Fund’.
Finally, he said Ireland needs to actively participate in emerging European pilot lines across several areas including advanced nodes, heterogeneous integration, photonics packaging and more, “bringing lab research, manufacturing and applications together in a centre of excellence of scale”.
The future of semiconductors
According to Fagas, Ireland can be a hub not only for semiconductor innovation but also a powerhouse in supplying products designed and manufactured in Ireland.
“Already today, Ireland presents a strong ICT cluster, hosting key players along the semiconductor value chain,” he said, citing examples such as Henkel, Qualcomm, Applied Materials, Analog Devices, Intel, Microchip and of course, Tyndall to name a few.
But while the focus is on the critical chips technology and the need to strengthen the ecosystem, both in Ireland and in Europe as a whole, he said it’s important to remember that the world is also facing multiple challenges related to the climate crisis and the planet’s ecological equilibrium.
“On the one hand, there is tenfold leverage on the carbon footprint generated by the production and usage of ICT versus the reductions enabled by ICT. On the other, the proliferation of devices and computing systems puts extra pressures on energy usage and e-waste generated as well as reliance on raw materials,” he said.
“The latter will drive developments in the semiconductor industry towards low-power, energy-efficient ICT and to the use of alternative materials and more environmentally friendly processing technologies.”
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