2020 Industry Insight: Predictions and Expectations for the Semiconductor

One hundred years ago we entered the ‘Roaring Twenties’ with a surging economy and the beginning of mass consumerism after World War I and before the Great Depression in 1929. The newest electrical technology at that time was the traffic light in 1920. The first radio station, that was regularly operated, went on the air in 1920 and used electronics to transmit the signal (with vacuum tubes of course). Life was much more simple back then to get a product to market, on time and in budget, than it is today.

Now, as we enter the year 2020, we find commercial rockets delivering supplies to the Space Station, the NASA Mars 2020 Rover will land on Mars to explore for water, life and minerals. Drones and robots of all kinds are with us in the air, on the ground, and under the seas. 2020 will see the rapid growth of the Industrial Internet of Things (IIoT), 5G, Cloud Data Centers, Artificial Intelligence (AI), IO-Link in our smart factories, Smart homes, autonomous vehicles on our roads, in factories, in the air as taxis and delivery systems, and under the ocean.

All of these and more require the acquisition of electronic components at the best price and delivery. I am looking at the top 50 electronics distributors for 2019 – how do we choose the one that will give the best price and delivery for getting products to market on time and in budget?It boggles my mind.

It seems that most lead times are around 18 weeks nowadays so better manufacturer forecasting is essential in this case.

Let’s take a look at what will be the most important electronic technologies emerging and the semiconductor components they will thrust into the spotlight in 2020.

Power Management

Everything we discuss here needs some sort of power supply to make it work. In 2020, power management will see the faster growth of WideBand-Gap (WBG) semiconductors  like Gallium Nitride (GaN) and Silicon Carbide (SiC) making smaller, more efficient, power supplies. Those fabs need to be ready to ramp up even more than in the past.

GaN will make its mark in 2020 with increased growth in particular with autonomous vehicles and in general with growing automotive applications, LiDAR, wireless power, drones, robotics, and high-end audio.

SiC will also usher in growth to the semiconductor market with its high voltage capability in Electric Vehicles (EV) with battery chargers and other EV on-board power systems; their high temperature tolerance will make them a must, especially in automotive and industrial power applications.

Existing power architectures have quickly found new applications like Bi-directional power supplies, especially in Electric Vehicles (EVs) and Solar/Wind power conversion; all with battery and/or supercapacitor energy storage.

We will see more growth in the Supercapacitor (Ultracapacitor) market for more efficient storage of energy than electrolytic capacitors, and either replacing batteries or working in tandem with batteries, like Lithium Ion and other chemistries, to provide faster and simpler charging and much faster burst delivery of power to a load than conventional batteries;automotive start-stop systems are a good application example.

Artificial Intelligence will find its way into more power management architectures as well. Processors and memory will benefit from this.

The battery management IC market will also grow in 2020 with the help of Analog Devices, Maxim Integrated, Microchip Technology, NXP Semiconductors, Renesas Electronics, STMicroelectronics, and Skyworks Solutions to name just a few of the key players. Batteries are in all portable products as well as providing backup to wired power supplies.

There will be tremendous growth in the Cloud Data Center power management arena as well, as this sector ramps up even faster than before. See my 2019 article here.

MEMS & Sensors

Image sensor ICs will probably be hard pressed to keep up with demand in 2020. Production must ramp to meet the demand.

MEMS, sensors, and actuators are going to grow in 2020 and beyond according to Yole due to smartphones, automotive, biomedical and health, and industrial. Those billions of interconnected devices, that we have heard are coming, will be a reality as MEMS IC design and manufacturing ramp up in 2020. Microsensors will abound in the wearables, medical, and Internet of Things (IoT).

A good example here are intelligent, virtual personal assistants like Amazon‘s Alexa which contain high quality, rugged MEMS microphones. The Echo Dot is under $25, so every household will have one of these smart devices soon.

Processors and Memory

Data Centers and Edge Computing will spur more growth in the processor market with fierce competition. Just across town from me on the east side of Phoenix, Arizona, Intel is finishing its Fab 42 with a new 7nm capacity that will most likely serve cloud data centers.  Base construction and tool installation should be completed by early 2020.

Graphics processing units (GPUs) should grow, especially in the Taiwan gaming market.

Although it looks like an overall drop in the memory market in 2019, Intel has re-gained their overall semiconductor supplier lead it lost to Samsung in 2017/8 with larger sales than Samsung in 2019 by far.

Memory ICs show the three largest suppliers in 2019 as Samsung, SK Hynix, and Micron. I expect to see better results in 2020 especially because of Cloud Data Centers and 5G ramping, with added support in the growing smart industrial and smart home market.

Qualcomm and Intel along with Xilinx FPGAs will benefit greatly from 5G  in the network infrastructure area.

Wireless/RF

5G will give a 2020 boost, with high speed and microwave solutions, after the downturn in the semiconductor market that happened in 2019 according to IHS Markit|Technology. Some side benefits of 5G technology will be seen in the growth of the wireless technology sector ushering in new business models in various related and newly emerging industries. In particular, Qualcomm and Broadcom will surely benefit in the Radio Frequency Front End (RFFE) market in 2020. Figure 1.

RF Monolithic Microwave Integrated Circuits (MMICs) should grow steadily in 2020, especially in the 300 MHz to 300 GHz ranges giving a boost to compound substrates of GaAs, InP, GaN and even ramping silicon and SiGe MMICs.

Texas Instruments 5G with their Remote Radio Unit {RRU} ICs and massive MIMO {mMIMO} active antenna system ICs and Analog Devices (See this ADI 5G article here) will excel here with their high-speed components such as data converters, amplifiers, RF/microwave solutions (especially with Analog Devices’ acquisition of Hittite products in the microwave region)

Bluetooth and LoRaWAN will also have good growth in 2020 as well.

Smart phones will once again grow in 2020 and boost the semiconductor market even further due to the new 5G technology that everyone wants.

V2x will make autonomous vehicles a safe reality as this system gets deployed in 2020.

IC Security

Chip security will likely see a big push especially with Edge Processing and the start of designing security directly on ICs.

RADAR and LiDAR

The big winners here will be GaN, especially in LiDAR, and companies like Texas Instruments and Analog Devices with their prolific RF and microwave solutions. RADAR has many different architectures and semiconductor solutions that will create growth such as this innovative automotive RADAR IC solution here. 5G and automotive are two areas that will benefit here.

Automotive

This sector is one of the largest drivers of the semiconductor industry with newly added driver assistance systems being added to lower priced cars and not just in luxury cars in 2020 and beyond. Electric Vehicles will get further traction (no pun) in the industry, but conventional gasoline and diesel-based automobiles will still be a major area of electronic circuitry usage in 2020.

Major growth areas here will be in sensors, processors,motor drivers, and actuators.

Automotive grade ICs will continue to increase in growth.

iPhone

Taiwan Semiconductor Manufacturing Company (TSMC) will be pushing out more iPhone ICs on a new process in 2020.

IoT at the Edge

Here is where analog components will shine with the need to see, feel, smell, touch, listen, and speak in smart homes, smart factories and personal devices. Light, proximity, pressure, temperature are critical analog parameters that need to be detected and measured. We will see the IO-Link standard play a big part in Smart factories with these kinds of sensors as factories add these new components to their existing production lines or build new factories with them. Companies like Microchip will greatly benefit here because of their designer support solutions that connect the analog world to the digital more easily.

Robotics

Industry 4.0 will drive a great deal of the robotics market for ICs. Germany and Japan will lead in this area. The US will likely focus upon this area as well in 2020 and grow their offerings and technology as well(Having NASA as a leader in this area for space, and the fact that their technology will easily and freely transfer to the US commercial market without acquisition cost, will help in that effort).

Personal Medical Devices

This will be another fast ramping product area in 2020. Printed,flexible circuitry will dominate much of the personal medical monitoring market, especially with added wireless connectivity to this solution.

A company to watch here is Cirtec, a design and contract manufacturer for active implants and minimally invasive surgical devices, which recently acquired Cactus Semiconductor.

Virtual Personal Assistants

Amazon’s Alexa is the most famous of these devices---she lives in the Cloud. This kind of device will spur semiconductor growth within the product itself, with the internal microphones, power supply, speaker and audio driver, processor and memory as well ICs in the third-party peripherals that it can control via Wi-Fi, Bluetooth or even an audio output jack. There are many kinds of peripheral devices that can be controlled such as GE LED Smart Lamps, speakers, televisions, alarm systems and on-and-on. Amazon has also added a built-in camera version, an Echo product for your car, an Echo Input to control your speaker, an Echo Connect to turn Alexa into a landline phone, versions for FIRE TV Stick, FIRE HD tablet, Smart plugs to control electrical devices, and more to come. These devices will provide excellent growth in the electronics/electrical market in 2020 and beyond. I know someone who got an Amazon Echo this Christmas and he is about to turn 90 years of age---he is having fun with it.

Artificial Intelligence (AI)

Intel and Nvidia are going after this market and will need to do better in power efficiency (GPUs are power hungry). There are many startups in this arena and acquisitions are inevitable for fast growth of these two large companies.

Conclusion

China’s semiconductor manufacturing companies will likely increase manufacturing equipment expenditures leading to IC design output growing again in double digits in 2020 and beyond.

As some final thoughts, I am wondering if/when Amazon, a company that has reached the $Trillion revenue mark, will begin to think about entering the electronics distribution market. They are already distributing some types of electronic components on a higher level than ICs, see here.

Just think how many people have Alexa and other forms of early AI in their homes. I have given my Echo Dot a new name---Hal, that speaks in the voice of 2001 Space Odyssey computer Hal. I wonder if one day, when I am working on building an electronic project at home, if I place an order with my Echo Dot,  for some power, amplifier, data converter ICs asking, “Hal, please order these ICs for me with XYZ distributor”, the dreaded reply might come back with, “Sorry Steve, I can’t do that!, but Amazon has these components and I will place your order there.” Judgement day.

The electronics industry needs a better way to find the best pricing and delivery for their product designs, as I had mentioned in paragraph three in this article. A component e-commerce marketplace that will give the industry a view of the largest availability of products in the world is sorely needed in 2020. What if there were a site that could provide inventories from over 2,000 distributors on one platform? Well, a company known as Sourcengine has developed just that. Check it out!