Semiconductor Industry - Unoriginal Investor

Updated: 2024-12-19 **Table of Contents** - [[#Semiconductor Ecosystem|Semiconductor Ecosystem]] - [[#Semiconductor Ecosystem#Foundational Layer Industries|Foundational Layer Industries]] - [[#Semiconductor Ecosystem#Production Layer Industries|Production Layer Industries]] - [[#Semiconductor Ecosystem#Application Layer Industries|Application Layer Industries]] - [[#Semiconductor Ecosystem#Specialized Established Industries|Specialized Established Industries]] - [[#Semiconductor Ecosystem#Emerging Technology Industries|Emerging Technology Industries]] - [[#Product Level Overlaps|Product Level Overlaps]] # Semiconductor Ecosystem **Foundational Layer (Traditional "Upstream")** - Core Technology Enablers - Materials companies producing ultra-pure silicon, specialty gases, chemicals * Equipment manufacturers (WFE) developing increasingly sophisticated tools * Verification and testing equipment manufacturers * Research institutions advancing fundamental semiconductor science - Design Infrastructure * EDA companies providing essential design tools * IP core providers offering standardized building blocks * Design verification service providers **Production Layer (Traditional "Midstream")** - Manufacturing Ecosystem - Pure-play foundries operating at various technology nodes - IDMs maintaining integrated operations - Specialty process foundries serving niche markets - Design Houses - Fabless companies focusing on innovation - System companies with in-house chip design - Post-Production Services - Assembly and testing companies - Advanced packaging specialists - Quality assurance providers **Application Layer (Traditional "Downstream")** - Component Integration * Module manufacturers * Board-level integrators * Subsystem providers - Market Access - Specialized distributors - Value-added resellers - Direct sales channels - End Applications - Device manufacturers - Infrastructure providers - System integrators Key industry dynamics: 1. Circular Dependencies: Many "downstream" players actually influence "upstream" development. For example, device manufacturers' requirements often drive foundational technology development. 2. Blurred Boundaries: Companies increasingly operate across multiple layers. Consider how some IDMs offer foundry services while also designing custom chips for specific applications. 3. Innovation Flow: Technical advances can originate at any layer and propagate both up and down the chain. Advanced packaging innovations, for instance, influence both chip design and system integration. 4. Value Creation: The traditional upstream/midstream/downstream model suggests a linear value addition, but modern semiconductor value creation is more networked and interdependent. 5. Market Power: Strategic control points exist at various layers, not just in traditional upstream segments. For example, advanced packaging capabilities like CoWoS are becoming as crucial as foundry technology. ## Foundational Layer Industries | Industry | Materials Suppliers | | --------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Description | Producers of ultra-pure materials essential for semiconductor manufacturing, including silicon wafers, specialty gases, and chemicals | | Key Companies | [[3436 JP - SUMCO]] [[WAF GR - Siltronic]] [[MRK GR - Merck KGaA]] [[4063 JP - Shin-Etsu Chemical]] [[4004 JP - Resonac]] [[4185 JP - JSR Corp]] - private 2024 [[LIN US - Linde]] [[APD US - Air Products]] | | Customers | Foundries, IDMs, memory manufacturers | | Suppliers | Raw material producers, specialty chemical companies, industrial gas companies | | Notable Factors | High purity requirements, long-term supply agreements, high barriers to entry, concentrated market structure | | Industry | Wafer Fabrication Equipment (WFE) Manufacturers | | --------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Description | Producers of specialized machinery and tools required for semiconductor manufacturing | | Key Companies | [[ASML NA - ASML]] [[AMAT US - Applied Materials]] [[LRCX US - Lam Research]] [[KLAC US - KLA Corporation]] [[TOELY US - Tokyo Electron]] [[ENTG US - Entegris]] | | Customers | [[2330 TT - TSMC]] [[INTC US - Intel]] [[005930 KS - Samsung Electronics]] [[UMC US - United Micro]] | | Suppliers | Precision component manufacturers, specialty materials suppliers | | Notable Factors | High R&D intensity, oligopolistic market structure, cyclical demand patterns | | Industry | Verification & Testing Equipment | | --------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | | Description | Makers of specialized equipment for testing and verifying semiconductor performance | | Key Companies | [[TER US - Teradyne]] [[6857 JP - Advantest]] [[COHU US - Cohu]] [[MKSI US - MKS Instruments]] [[AEIS US - Advanced Energy]] | | Customers | IDMs, foundries, assembly & test companies | | Suppliers | Precision component manufacturers, software providers | | Notable Factors | Growing importance with increasing chip complexity, recurring revenue from services | | Industry | Electronic Design Automation (EDA) | | --------------- | ------------------------------------------------------------------------------------------------------- | | Description | Providers of software tools essential for designing and testing semiconductor chips | | Key Companies | [[SNPS US - Synopsys]] [[CDNS US - Cadence]] [[ANSS US - Ansys]] [[MENT US - Mentor Graphics]] | | Customers | IDMs, fabless companies, foundries | | Suppliers | Software infrastructure providers, computing hardware manufacturers | | Notable Factors | High barriers to entry, recurring revenue model, essential for chip development | | Industry | IP Core Companies | | --------------- | ------------------------------------------------------------------------------------------------------------------------------ | | Description | Developers and licensors of semiconductor intellectual property, including processor architectures and standard cell libraries | | Key Companies | [[ARM US - Arm Holdings]] [[CEVA US - CEVA]] [[SiFive (Private)]] [[RMBS US - Rambus]] | | Customers | Fabless companies, IDMs, system companies | | Suppliers | EDA companies, verification service providers | | Notable Factors | High margins, scalable business model, network effects, standards-dependent | ## Production Layer Industries | Industry | Pure-Play Foundries | | --------------- | -------------------------------------------------------------------------------------------------------------------- | | Description | Specialized manufacturers focusing solely on producing chips for other companies, leveraging scale economies | | Key Companies | [[2330 TT - TSMC]] [[UMC US - United Micro]] [[GFS US - GlobalFoundries]] [[981 HK - SMIC]] | | Customers | [[NVDA US - NVIDIA]] [[AMD US - AMD]] [[QCOM US - Qualcomm]] [[AAPL US - Apple]] | | Suppliers | [[ASML NA - ASML]] [[AMAT US - Applied Materials]] [[LRCX US - Lam Research]] [[TOELY US - Tokyo Electron]] | | Notable Factors | Massive capital requirements, technology leadership critical, capacity utilization key to profitability | | Industry | Integrated Device Manufacturers (IDMs) | | --------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | | Description | Vertically integrated companies that design, manufacture, and sell their own semiconductors, maintaining complete control over the production process | | Key Companies | [[INTC US - Intel]] [[005930 KS - Samsung Electronics]] [[TXN US - Texas Instruments]] [[6723 JP - Renesas]] [[STM US - STMicro]] | | Customers | Electronic device manufacturers, automotive companies, data centers, industrial manufacturers | | Suppliers | [[AMAT US - Applied Materials]] [[ASML NA - ASML]] [[KLAC US - KLA]] [[SNPS US - Synopsys]] [[CDNS US - Cadence]] | | Notable Factors | High capital requirements, manufacturing flexibility, vertical integration advantages, increasing cost pressure from fabless + foundry model | | Industry | Specialty Process Foundries | | --------------- | ------------------------------------------------------------------------------------------------------------- | | Description | Foundries focusing on specific process technologies like RF, high-voltage, or automotive-grade semiconductors | | Key Companies | [[TSEM US - Tower Semiconductor]] [[5347 TT - Vanguard International]] | | Customers | Analog/mixed-signal companies, automotive semiconductor companies | | Suppliers | Specialty equipment manufacturers, materials suppliers | | Notable Factors | Higher margins than commodity manufacturing, specialized expertise, smaller scale | | Industry | Fabless Semiconductor Companies | | --------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | | Description | Companies specializing in chip design while outsourcing manufacturing to foundries, enabling focus on innovation without fab investments | | Key Companies | [[NVDA US - NVIDIA]] [[AMD US - AMD]] [[QCOM US - Qualcomm]] [[AVGO US - Broadcom]] [[MRVL US - Marvell]] | | Customers | Consumer electronics makers, data centers, telecom equipment manufacturers, automotive companies | | Suppliers | [[2330 TT - TSMC]] [[SNPS US - Synopsys]] [[CDNS US - Cadence]] [[UMC US - United Micro]] | | Notable Factors | Lower capital requirements, design flexibility, dependent on foundry capacity, sensitive to manufacturing cost fluctuations | | Industry | Assembly, Testing & Packaging | | --------------- | ------------------------------------------------------------------------------------------------------------------------------- | | Description | Specialists in final-stage semiconductor production, including chip packaging, testing, and quality assurance | | Key Companies | [[ASX US - ASE Technology]] [[AMKR US - Amkor Technology]] [[600584 CH - JCET Group]] [[6239 TT - PowerTech]] | | Customers | IDMs, fabless companies, foundries | | Suppliers | Packaging materials suppliers, testing equipment manufacturers | | Notable Factors | Labor-intensive, increasing technical complexity, growing importance with advanced packaging trends | ## Application Layer Industries | Industry | Semiconductor Distribution | | --------------- | ----------------------------------------------------------------------------------------------------- | | Description | Companies that distribute and provide value-added services for semiconductor components | | Key Companies | [[ARW US - Arrow Electronics]] [[AVT US - Avnet]] [[WCC US - Wesco]] [[6857 JP - Advantest]] | | Customers | Small/medium electronics manufacturers, industrial companies | | Suppliers | Semiconductor manufacturers across all categories | | Notable Factors | Working capital intensive, value-added services increasingly important, consolidating industry | ## Specialized Established Industries | Industry | Memory Manufacturers | | --------------- | ---------------------------------------------------------------------------------------------------------------------------------------------- | | Description | Specialists in producing memory chips (DRAM, NAND flash) used in all electronic devices. Memory has highly optimized, dedicated fab processes. | | Key Companies | [[000660 KS - SK Hynix]] [[005930 KS - Samsung Electronics]] [[MU US - Micron]] [[WDC US - Western Digital]] [[285A JP - Kioxia]] | | Customers | PC manufacturers, smartphone makers, data center operators, automotive companies | | Suppliers | Equipment manufacturers, materials suppliers, EDA companies | | Notable Factors | Highly cyclical, commodity-like pricing, intense capital requirements | | Industry | Analog/Mixed Signal Companies | | --------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Description | Specialists in chips that interface between analog signals and digital systems, including power management, sensors, and RF components. Chips require specialized process nodes. | | Key Companies | [[ADI US - Analog Devices]] [[TXN US - Texas Instruments]] [[NXPI US - NXP Semi]] [[ON US - ON Semi]] [[SWKS US - Skyworks]] | | Customers | Industrial equipment makers, automotive companies, consumer electronics manufacturers, telecom equipment providers | | Suppliers | Specialty foundries, equipment manufacturers, materials suppliers | | Notable Factors | Higher margins than digital, fragmented market, specialized process technologies, long product lifecycles | | Industry | Power Semiconductor Companies | | --------------- | ------------------------------------------------------------------------------------------------------------------- | | Description | Specialists in high-power handling semiconductors, including IGBT and SiC/GaN devices that require unique materials | | Key Companies | [[IFX GR - Infineon]] [[STMPA FP - STMicro]] [[6963 JP - Rohm Co]] [[WOLF US - Wolfspeed]] | | Customers | Industrial equipment makers, electric vehicle manufacturers, power infrastructure compa | | Suppliers | Specialty materials suppliers, equipment manufact | | Notable Factors | Growing with electrification trends, high barriers to entry, specialized manufacturing pro | ## Emerging Technology Industries | Industry | High-Speed Connectivity & SerDes | | --------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Description | Companies specializing in high-speed data connectivity solutions for data centers, AI/ML applications, and cloud infrastructure | | Key Companies | [[AVGO US - Broadcom]] [[CRDO US - Credo]] [[ALAB US - Astera Labs]] [[MRVL US - Marvell]] [[MTSI US - MACOM]] [[AWE LN - Alphawave]] | | Customers | Hyperscalers, data center operators, networking equipment manufacturers | | Suppliers | Foundries, IP companies, testing equipment providers | | Notable Factors | Rapid growth driven by data center expansion, AI computing demands, critical role in enabling higher bandwidth | | Industry | Quantum Computing Hardware | | --------------- | --------------------------------------------------------------------------------------------------- | | Description | Developers of quantum processors and supporting infrastructure, including cryogenic control systems | | Key Companies | [[IONQ US - IonQ]] [[RGTI US - Rigetti Computing]] [[IBM US - IBM]] [[GOOGL US - Alphabet]] | | Customers | Research institutions, government agencies, early commercial adopters | | Suppliers | Specialty materials providers, cryogenic equipment manufacturers | | Notable Factors | Pre-commercial market, high R&D intensity, competing technological approaches | | Industry | Silicon Photonics | | --------------- | ------------------------------------------------------------------------------------------------------------------------------------ | | Description | Companies developing integrated photonic circuits for high-speed data transmission and sensing applications | | Key Companies | [[COHR US - Coherent]] [[LITE US - Lumentum]] [[COHR US - Coherent]] [[MRVL US - Marvell]] (originally [[IPHI US - Inphi]]) | | Customers | Telecommunications companies, data center operators, autonomous vehicle manufacturers | | Suppliers | Specialty foundries, materials suppliers, testing equipment manufacturers | | Notable Factors | Growing importance in data center interconnects, emerging applications in sensing and computing | | Industry | AI/ML Accelerator Companies | | --------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Description | Specialists in developing processors optimized for artificial intelligence and machine learning workloads | | Key Companies | [[NVDA US - NVIDIA]] [[AMD US - AMD]] [[AMZN US - Amazon]] [[GOOGL US - Alphabet]] [[AAPL US - Apple]] [[SIMO US - Silicon Motion]] [[CBRS US - Cerebras]] [[Groq (Private)]] [[SambaNova Systems (Private)]] [[Graphcore (Private)]] | | Customers | Cloud service providers, enterprise AI users, autonomous system developers | | Suppliers | Foundries, IP companies, EDA providers | | Notable Factors | Explosive growth potential, high performance requirements, competing architectural approaches | | Industry | Edge Computing Semiconductors | | --------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------ | | Description | Companies focusing on processors and systems optimized for edge computing applications | | Key Companies | [[LSCC US - Lattice Semiconductor]] [[XLNX US - Xilinx]] (acquired by [[AMD US - AMD]]) [[AMKR US - Amkor Technology]] [[NXPI US - NXP Semi]] | | Customers | IoT device manufacturers, industrial automation companies, automotive manufacturers | | Suppliers | Foundries, IP providers, packaging companies | | Notable Factors | Growing with IoT adoption, emphasis on power efficiency, security requirements | # Product Level Overlaps | Memory Manufacturers | DRAM | HBM | NAND | | ----------------------------------- | ---- | --- | ---- | | [[MU US - Micron]] | ✅ | ✅ | ✅ | | [[005930 KS - Samsung Electronics]] | ✅ | ✅ | ✅ | | [[000660 KS - SK Hynix]] | ✅ | ✅ | ✅ | | [[285A JP - Kioxia]] | | | ✅ | | [[WDC US - Western Digital]] | | | ✅ | | Logic Manufacturers | CPUs | GPUs | SoCs | MCUs | | ------------------------------ | ---- | ---- | ---- | ---- | | [[INTC US - Intel]] | ✅ | | | | | [[AMD US - AMD]] | ✅ | ✅ | | | | [[NVDA US - NVIDIA]] | | ✅ | | | | [[QCOM US - Qualcomm]] | | | ✅ | | | [[TXN US - Texas Instruments]] | | | | ✅ | | [[STMPA FP - STMicro]] | | | | ✅ | | [[NXPI US - NXP Semi]] | | | | ✅ | | [[MCHP US - Microchip]] | | | | ✅ | | Semiconductor Manufacturing Services | Foundry | | ------------------------------------ | ------- | | [[2330 TT - TSMC]] | ✅ | | [[005930 KS - Samsung Electronics]] | ✅ | | [[GFS US - GlobalFoundries]] | ✅ | | [[UMC US - United Micro]] | ✅ | | [[981 HK - SMIC]] | ✅ | | Electronic Design Automation | EDA Tools | | ----------------------------- | --------- | | [[SNPS US - Synopsys]] | ✅ | | [[CDNS US - Cadence]] | ✅ | | [[MENT US - Mentor Graphics]] | ✅ | | [[ANSS US - Ansys]] | ✅ | | Wafer Fabrication Equipment (WFE) | Lithography | Etching | Deposition | Cleaning | | --------------------------------- | ----------- | ------- | ---------- | -------- | | [[ASML NA - ASML]] | ✅ | | | | | [[AMAT US - Applied Materials]] | | ✅ | ✅ | ✅ | | [[LRCX US - Lam Research]] | | ✅ | ✅ | ✅ | | [[8035 JP - Tokyo Electron]] | | ✅ | ✅ | ✅ | | Analog and Mixed-Signal IC | Analog | Mixed | | ------------------------------ | ------ | ----- | | [[ADI US - Analog Devices]] | ✅ | ✅ | | [[TXN US - Texas Instruments]] | ✅ | ✅ | | [[MXIM US - Maxim]] | ✅ | ✅ | | [[ON US - ON Semi]] | ✅ | ✅ | | RF/Microwave Components | RF | Microwave | | ----------------------- | --- | --------- | | [[QRVO US - Qorvo]] | ✅ | ✅ | | [[SWKS US - Skyworks]] | ✅ | | | [[MTSI US - MACOM]] | ✅ | ✅ | | Optoelectronics | LEDs | Laser Diodes | Photodetectors | | ---------------------- | ---- | ------------ | -------------- | | [[AVGO US - Broadcom]] | ✅ | ✅ | ✅ | | [[LITE US - Lumentum]] | | ✅ | ✅ | | [[COHR US - Coherent]] | ✅ | ✅ | ✅ | | Automotive Semi | Automotive ICs | | ---------------------- | -------------- | | [[IFX GR - Infineon]] | ✅ | | [[NXPI US - NXP Semi]] | ✅ | | [[6723 JP - Renesas]] | ✅ | | Power Semi | Discretes | Modules | | ---------------------- | --------- | ------- | | [[IFX GR - Infineon]] | ✅ | ✅ | | [[ON US - ON Semi]] | ✅ | ✅ | | [[STMPA FP - STMicro]] | ✅ | ✅ |