Semiconductors and microchips are vital in manufacturing all sorts of devices, including computers, equipment, household goods, automobiles, and many other items we encounter daily. These items have been tremendously affected by supply chain issues resulting from the COVID-19 pandemic. These are expected to continue for the foreseeable future, as is the severe shortage of microchips and semiconductor materials. Several current trends in the industry will likely continue, while others will develop as industry and producers shift to meet global demand.
In this article, learn about current and future trends affecting the industry, related industries, and Spain and TechTeamz’s role in the future of semiconductors and microchips.
Current trends in semiconductors and microchips
In addition to ongoing supply chain issues, other current industry trends and geopolitical impacts are expected to affect the semiconductor and microchip industry. These trends are projected to have numerous effects, including industry mergers, acquisitions, and the anticipated size of future contracts. While some megadeals have been negotiated despite supply chain delays, the anticipation is that companies should expect smaller deals in the future.
Some companies, particularly tech giants, have shifted to producing chips and semiconductors in-house. The resulting changes in the supply and demand of chips and related devices are causing a ripple effect throughout the industry. Those companies producing these chips must learn to get the most value possible from smaller deals moving forward. In addition, businesses must continue to adjust as the supply and demand for chips and related software and hardware components shift. The shift to in-house production is allowing companies who choose to do so to create proprietary chips with specific requirements for their hardware and software.
These proprietary chips are leading to increased competition and the use of newer technologies. Arm and other newer technologies are increasingly used over traditional x86 technology, allowing for customization. Large producers must adapt to the trend of using newer technologies to remain competitive. Lastly, the ever-increasing demand for chips and semiconductors driven by modern devices and emerging technologies like 5G, artificial intelligence, and the internet of things is expected to continue.
The future of semiconductors and microchips
Technology requirements continue to migrate to newer technologies, and more chips or semiconductors with increased capabilities and customization are expected to be the way of the future. To meet the requirements of these anticipated trends, manufacturers must also find ways to decrease the power and water requirements for the manufacturing process. Some companies also choose to implement water recycling and clean power to meet sustainability requirements. These methods to conserve and protect natural resources become increasingly important as demand continues to multiply. Companies must also become conscious of using resources as good stewards while allowing them to balance resource requirements and meet demand. Projections based on recent growth anticipate a 12.2% annual increase through the end of the decade.
Even as emerging technology increases growth in the semiconductor sector, there are no regulations, guidance, or standard specifications governing these devices and related technologies. Technologies drive much of the industry’s growth, including 5G, artificial intelligence, IoT, and self-directed vehicles, primarily as yet unregulated industries. The lack of standards will continue to present challenges in development; as legislation, guidance, and industry definitions are put into place and change over time, certain product elements and semiconductor technologies currently in use may become obsolete or not conform. The creation and acceptance of universal standards and regulation of these emerging technologies will help push the expansion of the microchip and semiconductor industries.
Semiconductor production continues to shift to the areas where they are required as the industry bounces back from the supply chain issues. It is hoped that future problems could be tempered by local production and supply of semiconductors and microchips. The shift in production will likely bring unanticipated changes, which the industry must make additional adjustments and allowances to overcome.
Related industries influenced by semiconductors and microchips
Household products, the automotive industry, and the telematics industry are among the hardest hit by recent supply chain problems, accompanied by a surge in demand, creating real problems. In Spain, carmakers like Renault and Volkswagen were forced to shut down entire assembly lines when the necessary chips and other components were unavailable. A shortage of equipment in telematics has caused problems with order fulfilment. Spain and other countries are hopeful that a shift in production to local facilities will help lessen the impact of future supply chain problems.
Spain’s role in the industry in the future
Where does Spain factor into the microchip and semiconductor industry? Spain has set aside 11 billion euros from the European pandemic funds, which Spain’s Prime Minister Pedro Sanchez has announced will be available for the semiconductor industry. The country hopes to grow its semiconductor industry and put Spain at the forefront of industrial progress and technological growth. The government is expected to provide additional funds to this effort moving forward.
The government funds are expected to increase overall production in Spain with nearly three-quarters of the funds expected to provide capital for new and expanded semiconductor and microchip production facilities. Increased local facilities would supply other manufacturers in Spain with much-needed technologies to operate or enhance their commodities. The government hopes that the injection of funds into new facilities will develop the overall capabilities, design, and production capacity. The anticipation is that these funds will both create Spanish jobs and increase self-reliance.
TechTeamz’s engineering capabilities for these industries
Outsourcing has become increasingly essential to meet the growth and demand in the semiconductor industry. It takes talented and very specialised engineers to stay at the forefront with the upset in supply and demand and other factors, and talent can prove to be the cutting edge.
TechTeamz, based in Spain, can provide full engineering teams or augment your existing staff. We carefully select our engineers, match them with your project requirements, and handle all HR needs. Our highly-specialised engineers will play a role in the future of the microchip and semiconductor industry in Spain and worldwide.