Daniel Pilling, a technology analyst at Sands Capital with a focus on semiconductors, dives into the explosive growth of the semiconductor industry, driven by AI and machine learning. He explores the intricate history from vacuum tubes to today's advanced chips and discusses the complexities of manufacturing processes. Pilling highlights Entegris's critical role in supplying essential materials and the unique challenges and opportunities faced in this rapidly evolving market, suggesting that investment strategies should avoid betting on single winners.
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insights INSIGHT
Compute Demand and Moore's Law
Humanity's insatiable need for compute drives semiconductor advancement, growing roughly 50% annually.
Moore's Law, enabling transistor shrinkage, allows more compute power in smaller spaces, exemplified by smartphones.
question_answer ANECDOTE
Smartphone Evolution
The evolution from bulky Nokia phones with simple games like Snake to powerful iPhones illustrates Moore's Law's impact.
Today's iPhones possess greater computing power than mainframes of the past, showcasing miniaturization's effect.
insights INSIGHT
Transistor Shrinkage and Complexity
Shrinking transistors increases complexity due to quantum effects like tunneling, necessitating 3D architectures.
This complexity demands more resources and intricate processes, similar to building skyscrapers versus regular buildings.
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You’ll find semiconductors in just about every device with a plug, a power button, or a battery. In this episode of What Matters Most, Sands Capital research analyst Daniel Pilling explains why Entegris, a critical player in the global semiconductor industry, is seeing rapid growth as the demand for artificial intelligence (AI) and machine learning intensifies.
(00:01:37) From vacuum tubes to artificial intelligence (AI) in 80 years—a quick history of semiconductors
(00:04:51) How small is a nanometer really? Moore’s Law in action, shrinking chip circuitry.
(00:07:33) Exponential complexity in chipmaking. Skyscrapers and bread?
(00:09:00) But actually, how do you make a semiconductor?
(00:15:18) Entegris: chemicals or technology analysts? Who covers it and why?
(00:18:56) “One throat to choke”? And the chokepoint explained.
(00:26:28) Why consumables have less “lumpy” capital expenditures
(00:26:51) Chips that power EVs [electric vehicles]
(00:30:22) Don’t bet on the winner in this market, and what to do instead.
(00:33:57) Advantages and industry talent finding an employer of choice
(00:40:32) The iPhone moment and where AI is going from here
(00:42:17) Outlook for Entegris and semiconductor growth
Sands Capital - What Matters Most