Apple and Samsung were at the top of OEMs in semiconductor spending for 2013 and likely to stay within the leading group in 2014 as well

Apple and Samsung - the top of OEMs in semiconductor

A report from IHS Technology released a couple of months ago revealed that Samsung and Apple were the top buyers of semiconductor chips in 2013 among the leading original equipment manufacturers (OEMs).

Myson Robles-Bruce, senior analyst for semiconductor spend and design analysis at IHS, said that in first place was Apple, with chip spending of more than $30 billion, followed by Samsung, with slightly more than $22 billion. He noted that Samsung, however, had a larger spending increase on chips with about a 30 percent increase from 2012 levels as compared to the smaller increase by Apple. The two leading companies combined for 14 percent of total OEM spending in 2013.

As for this year, it is likely that the two giant companies may continue to spend in line with past year.

A few days, ago, Apple CEO Tim Cook revealed, for example, that Apple will still invest a lot on the Mac while most other companies are now throwing in the towel with PC development.

In another recent report published by Gartner a few days ago, Samsung is expected to be one of the companies to lead capital spending in 2014 as well, with major investments for the development and mass production of new technologies as 3-bit NAND solid state drive for the consumer and enterprise markets.

As for last year spending, among the seven different application categories for semiconductors, the largest spending on semiconductors was in the wireless segment, which accounted for almost one-third of total OEM chip spending at 31 percent.

This was followed by a 20 percent for chip spending on various computer platforms and a 15 percent for consumer devices. The industrial, automotive, wired communications, and computer peripherals categories round up the total OEM chip spending with each one claiming a single-digit percentage share. One noteworthy statistic is in the wireless segment, with spending on tablets in 2013 overtaking that of wireless infrastructure for the first time.

The situation is likely to change for this year, with an increase in spending for tablets and mobile devices along with a significant rise in investments in the so-called “internet-of-things” which is widely assumed to become the next big thing in the semiconductor and electronics market.

In the tablet and smartphone arena, Apple and Samsung remain locked in their rivalry as the top companies, where Apple is still leading on both fronts but facing increasing competition from the giant Korean maker.

In 2013, Apple and Samsung were followed by Hewlett-Packard, Lenovo, Dell, Cisco Systems, Sony, Huawei Technologies, Panasonic, and Toshiba to round up the top ten OEM semiconductor spenders for 2013. The served available market for semiconductor spending in 2013 reached $237.2 billion, which is an almost 5 percent increase from $226.7 billion in 2012.

Robles-Bruce noted that one example of the challenge that Apple faces is Samsung’s strategy with its intention to utilize flexible active-matrix organic light-emitting diode (AMOLED) display technology on its products.  Moreover, Samsung’s drive to sell its products in areas that already have high smartphone penetration could be a challenge to Apple. Apple is also hindered by the high manufacturing cost of the iPhone.

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Challenges and opportunities in the post-silicon power semiconductor world

Silicon Power Semiconductor

Since the inception of power semiconductor devices, the market has always looked for raising their breakdown voltage.

The breakdown voltage is the highest voltage applicable to the device before it breaks down and becomes non-functional.

Usually, semiconductor devices used in personal computers, tablets and other electronic equipment do not need to be able to withstand high voltages but the situation is very different when considering power semiconductor devices such as switches, IGBTs, MOSFETs among others.

Power semiconductor devices are used to control the operation of electric engines, smart grids, etc. and they usually operate at voltages that are too high to be handled by conventional semiconductor devices.

The breakdown voltage is directly linked to the material band gap and silicon, the material used in most semiconductor devices, has a band gap that is not wide enough to withstand high voltages. Other materials like silicon carbide and gallium nitride have band gaps up to three times that of silicon and this translates into a breakdown voltage that can be ten times as much as that of conventional silicon-built devices.

Using gallium nitride in power semiconductor devices is, however, not trivial: usually gallium nitride is deposited on sapphire substrates which are more difficult and more expensive to work with than conventional silicon.

Successful, production-scale deposition of gallium nitride on silicon would be an enormous breakthrough for the industry and several companies and research organizations are working hard on this; so far, however, the technology has yet to reach the full-production scale level

The main issue is that the two materials have very different crystal structures and depositing GaN over silicon produces internal stress within the structure and this may lead to cracks.

Few pioneers such as Efficient Power Conversion have tried to overcome the problem by adding a buffer layer and growing GaN epitaxially over it, but the process is still very costly even if it is expected that prices will go down sensibly as shipping quantities increase

If gallium nitride will be general adopted by the industry in the power semiconductor market, this will be at the expenses of another material which is another strong candidate for replacing silicon: silicon carbide

Silicon carbide wafers have been in the market for quite a while now, but due to their crystal structure, similar to that of diamond they are quite hard to process

Some companies, such as Anvil Semiconductor, have proposed a new approach to the problem by depositing silicon carbide on silicon wafers, therefore substantially reducing the costs of production

Whether silicon carbide or gallium nitride will come out as the winner in the competition as material of choice in the power semiconductor market remains to be seen but what looks quite clear already now is that soon the reign of silicon will be over.

The shift from silicon to gallium nitride, however, is not expected to be easy and without hurdles.

Paradoxically, one of the main issues that may hinder the adoption of GaN-based inverters in the automotive industry is the very quick switching time of GaN-based devices when compared to silicon. Switching times of GaN-based devices can be in the order of few MHz, way too much what is needed for motor drives that work with switching rates of few tens of KHz at best.

As explained by Marco Palma, Director of Systems and Applications at International Rectifier, “using gallium nitride for switching applications in the automotive industry is a little bit like using a Ferrari to go shopping“

Another big issue with adoption of gallium nitride is heat dissipation.

While silicon carbide has a good thermal conductivity, gallium nitride is not exactly performing well in this regard and, in order to avoid the heat to literally melt the metal wires, the whole package needs to be properly designed to convey the heat of out of it.

Companies like GaN Systems are currently considering possible solutions such as diamond heat spreaders to fix the issue.

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