#69 – Jon Y (Asianometry) on Problems And Progress in Semiconductor Manufacturing
Aug 31, 2023
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Jon Y, creator of the Asianometry YouTube channel and newsletter, discusses compute trends, semiconductor geopolitics, and the potential of room temperature superconductivity. They explore the distinctions between consumer and specialized hardware for AI, the role of semiconductor chips in the industry, and the challenges and concerns in semiconductor manufacturing. They also delve into complex supply chains, the concept of superconductivity, the research process, and the connection between nuclear weapons and the semiconductor supply chain.
Tech transfers in the semiconductor industry face challenges due to expertise, competition, and pace of innovation.
The specialization of AI chips, tailored for specific tasks, is driving advancements in the field.
The growth of the semiconductor industry depends on funding, demand, and economic factors.
Established semiconductor companies have advantages in resources and expertise, making it difficult for newcomers to gain market share.
Deep dives
The Challenges of Tech Transfers in the Semiconductor Industry
Tech transfers in the semiconductor industry are difficult due to several factors. One challenge is the need for knowledge transfer, as new entrants require expertise and guidance to navigate the complex manufacturing processes. Additionally, the industry is highly competitive, with established players already at the forefront of technological advancements. This makes it challenging for newcomers to catch up and gain a significant market share. Furthermore, the fast pace of innovation means that by the time a new player achieves production at a certain node, the leading companies have already moved on to even more advanced technologies, reducing the economic value of the new entrant's offerings.
The Increasing Specialization in AI Chips
There is a trend towards increasing specialization in AI chips, with different chips designed for specific tasks such as training or inference. CPUs dominated the market for a long time, but GPUs emerged as a key player in enabling the use of neural networks. More recently, specialized AI chips like Google's TPUs have gained prominence. These chips are designed to perform specific computations required for AI workloads, such as matrix multiplications. While CPUs and GPUs are more generalized, AI chips are increasingly tailored for AI-specific tasks, driving advancements in the field.
The Role of Money and Demand in Semiconductor Industry Growth
The growth of the semiconductor industry is closely tied to the availability of funding and the existence of a strong demand for chips. Companies like TSMC, Samsung, and Intel prioritize meeting the current demand and securing future funding over speculative advancements. While Moore's Law is not fundamentally limited by physics, economic factors and the need for clear use cases may impact the pace of innovation. Therefore, the key question lies in whether the demand and funding will remain sufficient to drive future advancements.
The Difficulty of Disrupting Established Semiconductor Companies
Disrupting established semiconductor companies can be challenging due to their significant financial resources and expertise. The industry giants have decades of experience, access to cutting-edge technology, and ample capital to invest in R&D and manufacturing. While new entrants can benefit from collaborations with foundries like TSMC, they must identify unique use cases and secure enough funding to overcome the fixed costs associated with chip development and production. The dominance of major players like Apple and intense competition define the semiconductor landscape, making it difficult for newcomers to gain market share.
The Challenges of Tech Transfer and the Importance of Product Quality
Tech transfers often fail because companies struggle to find customers for their products. It is important to consider the quality of the product and the need to learn and improve quickly. The semiconductor industry exemplifies the importance of economies of scale and the value of continuous learning from customers.
The Complexities of the Semiconductor Supply Chain
The semiconductor supply chain is a complex network of different stages, including chip design, chip manufacturing, packaging, and end-user delivery. Each stage has its own supply chain, resulting in a nested ecosystem. Lithography is a critical stage and crucial for scalability, but other stages like etch, deposition, and ion implantation also contribute to the overall process.
The Potential and Challenges of Room Temperature Superconductors
Room temperature superconductors, like LK99, if realized, could revolutionize industries like power transmission and fusion. However, commercializing superconductors poses significant challenges due to materials engineering, the need for high current densities, and the complexities of scaling production. Understanding and overcoming these challenges is crucial for harnessing the full potential of superconductors.
Jon Y is the creator of the Asianometry YouTube channel and accompanying newsletter. He describes his channel as making "video essays on business, economics, and history. Sometimes about Asia, but not always."
Compute trends driving recent progress in Artificial Intelligence;
The semiconductor supply chain and its geopolitics;
The buzz around LK-99 and superconductivity.
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