A semiconductor is made up of millions of transistors to process information for various technology devices like laptops, cellphones and electronics within vehicles and heavy-duty trucks.
According to the Semiconductor Industry Association (SIA), global demand for semiconductors has increased 10-20% over the last few years. Demand is projected to continue to grow 5% annually until 2030.
In order to keep up with that demand, the association found that manufacturing capacity would need to increase by 56%, an issue that is currently being addressed within the Creating Helpful Incentives to Produce Semiconductors for America (CHIPS) Act.
While some semiconductors are only an inch in diameter, the demand for these chips is not tiny, and neither is 45 to 60 days of work that goes into making them.
Making a semiconductor wafer
Since the 1940s, semiconductors have been made from a slice, or wafer, of the semiconductor material, crystalline silicon or silicon crystals. Making them out of silicon enabled the chips to be small enough to fit within the gadgets we use today.
While silicon is one of the most common substances on our planet, and is found in minerals that make up 90% of the Earth’s crust, electronics require high-grade silicon to produce high-functioning technology.
The most pure silicon is found in the purest quartz rocks, which come from a quarry in Spruce Pine, North Carolina. While it might seem odd to have one distinct location for these materials, it only takes 66,138,679 pounds of silicon to make the billions of microchips made each year.
Rolf Pippert, a mine manager for Quartz Corp in Spruce Pine, explained to BBC in an interview that the area has “decades of material” to keep up with demand.
In order to achieve the round shape of the wafer, companies grow silicon crystals using a method called the Czochralski process. During this process, high-purity silicon is melted within a crucible, or metal container, made of quartz at 2,597 degrees Fahrenheit.
Boron and phosphorus are added to the molten silicon in order to change its electronic properties.
A seed crystal is then dipped into the molten silicon and slowly manipulated through temperature adjustments and rotations to extract a cylindrical crystal.
The circular crystal, or boule, is then sliced with a wafer saw and polished to form the finished product, roughly between 100 and 450 mm in diameter.
Intellectual property concerns
Using 1,000 to 2,000 different design steps, billions of microscopically small circuits are built upon the semiconductor wafers to make the integrated circuits.
Many of these steps are guarded as intellectual property, making it much harder for companies to enter into the market and immediately produce more chips for increased demand.
“Intellectual property is the lifeblood of the semiconductor industry,” said John Neuffer, president and CEO of the SIA, in a 2017 press release. “Semiconductors are America’s fourth-largest export and underpin the entire economy. U.S. semiconductor companies invest nearly one-fifth of their revenue in research and development to stay at the forefront of innovation.”
While the United States holds a key part of the semiconductor’s materials in North Carolina, most semiconductor producers are overseas, specifically in Taiwan, home to the largest chip foundry.
The CHIPS Act aims to subsidize companies that can set up domestic manufacturing plants to create a more resilient supply chain for the future demand of these chips.
Creating this resiliency will allow U.S. consumers to continue buying technology products at the same demand levels they have been accustomed to.
Check out FreightWaves’ Transmission podcast to hear from Dan Hearsch, a managing director at AlixPartners, who breaks down the cause for the current chip shortage and his views on whether or not it will become a global crisis.