Here comes the US$1tril semiconductor industry, says Ajit Manocha CEO of SEMI

• Triple wave of disruptions propelling industry towards trillion dollar mark by 2030
• Urges Southeast Asia, including Malaysia, to work on getting more fabs built in region

Speaking at Semicon Southeast Asia 2024 held in Kuala Lumpur, yesterday, Ajit Manocha, CEO and President of SEMI highlighted the rapid growth of the global semiconductor industry which was riding a triple wave of technological disruptions that is propelling it toward the US$1 trillion market size milestone by 2030.

However, realizing this exponential growth amid an era of unprecedented challenges will require unprecedented industry collaboration.

Ajit outlined the three transformative waves fueling the industry's trajectory: the Internet of Things (IoT), Artificial Intelligence (AI), and Quantum Computing. One example Ajit, who has been President of SEMI (Semiconductor Equipment and Materials International) for seven years, likes to cite, as an example of the turbo charged growth of the industry is in how fast industry sales will grow. “While it took around 50 years for semiconductor sales to reach US$500 billion, this triad of disruptive forces is expected to double that figure to cross US$1 trillion within just the next five years,” he said.

"IoT was the growth driver in the last decade. This decade is one of AI, and what you’re seeing today is merely the tip of the iceberg, and that's going to take this growth to US$1 trillion," he confidently predicts.

If that doesn’t impress you, consider his prediction for Quantum Computing’s impact on future sales. “I think Quantum Computing is coming by the next decade, and it can take this industry to US$5 trillion by 2050,” he declared.

That may be a stretch, but management consultants McKinsey & Co have mapped out the US$1 trillion projection by 2030. Growth will be powered by the automotive sector with a CAGR in the mid teen percent of 13%-15% from 2021-2030, with computing and data storage to see slowest growth of 4% to 6% CAGR from 2021 to 2030.

“Our industry has been capturing high-single digit CAGR of 8% for many years now and even double-digit in some of the years,” Ajit noted.

To accommodate this explosive growth, SEMI's latest World Fab Forecast reveals 103 new 300mm and 200mm semiconductor fabs coming online across the globe between 2023 and 2027. 

Despite that, Ajit cautioned that an additional 50 fabs would likely be needed by 2030 to fully realize the digital transformation unlocked by the three disruptive waves predicted.

Thus, he urged that Southeast Asia, including Malaysia, need to get more fabs on shore.

“We need to create more hubs and redundancies so we can be more ready for any calamities or pandemic,” he explained.

As for the geopolitical issues, Ajit, over the last six months, has been promoting the SEMI International Policy Summit (SIPS), a gathering of policy makers around the globe with the top  60 to 70 semicon industry executives over the past 8 months. The first meeting was in Hawaii, with the second, last week, in Brussels. The next meeting may happen this Dec in Tokyo.

The frequency of the meetings is in response to unprecedented problems which are so difficult that no single company, no single country, no single CEO can address them, he explained.

This requires a partnership of governments, academia, industry and civil society working together. “Therefore, I urge Malaysia to be a part of SIPS. It should play an active role in it,” he said.