Open ecosystems shaping future innovation in the semiconductor industry | HCLTech

Open ecosystems shaping future innovation in the semiconductor industry

Rahul Goyal, Vice President at Intel, explores the evolving semiconductor industry and the role Intel is playing in shaping its future
8 minutes read
Nicholas Ismail
Nicholas Ismail
Global Head of Brand Journalism, HCLTech
8 minutes read
Intel’s vision shaping the semiconductor industry

If data is the lifeblood of innovation, then the semiconductor industry represents the foundation of modern business, technology and connectivity. The world is built on semiconductors. 

According to a report from SIA, from 1995 to 2015, an estimated $3 trillion in global GDP has been directly attributed to semiconductor innovation, along with an additional $11 trillion in indirect impact. 

And, despite recent struggles around supply chain shortages and the availability of semiconductors, which was caused by myriad macroeconomic and geopolitical factors, McKinsey estimates that the global semiconductor industry is projected to become a trillion-dollar annual revenue industry by 2030. 

This projected growth is attributed to factors like the rise of AI experimentation and implementation, the new remote working model and the surge in electric vehicle production. 

“We see a sustained long-term demand for semiconductors which will require the industry to collectively innovate and bring compelling products and technologies that improve the lives of every person on the planet,” says Rahul Goyal, Vice President at Intel. 

AI is generating significant demand, with Medium estimating that demand for processing power, largely for AI-related chips, could grow the semiconductor market by $500 billion in the next 10 years. 

Sustainable growth in the Siliconomy 

The rise of AI and the convergence of technology, and its semiconductor foundation, has led to what Intel CEO Pat Gelsinger describes as the ‘Siliconomy.' 

As technology becomes increasingly pervasive in people’s lives and in how organizations function, the Siliconomy is a concept that highlights semiconductors as the key enabler of evolving and sustainable modern economies. 

Public and private sectors are embracing this silicon-led future. The UK government recently announced a £1 billion investment for design, research and the advancement of chip leadership to secure its digital future. This follows significantly larger investments by the EU, which committed $49 billion as part of the European Chips Act, and the US, which pledged $52.7 billion over the next 10 years for semiconductor manufacturing, R&D and workforce development as part of The CHIPS and Science Act 2022. 

“As the world goes digital, silicon will be at the center of the next global expansion,” says Goyal. “With challenges around the increasing cost of developing advanced technologies and rolling them out at scale, public and private sector partnerships and industry ecosystem collaboration will be critical.” 

In this Siliconomy, along with innovation, sustainability is a priority and when it comes to making investments to reduce IT-related emissions, energy-efficient hardware is the focus. Among companies investing, 62% invest in energy efficient hardware, 57% invest in renewable energy sources and 54% invest in new “green” technology, according to the Sustainable CTO report from Intel. 

“Computing promises greater opportunities and a brighter future if harnessed in the right way,” continues Goyal. 

Embracing the opportunities 

In pursuit of helping enterprises foster innovation and drive new opportunities with semiconductors, Intel recently announced a significant shake-up. 

Originally founded as an Integrated Device Manufacturer (IDM), Intel is known as a semiconductor company that both designs and builds computer chips. IDM 2.0 represents the company’s evolution. 

To compete in a highly competitive market, the new IDM model includes manufacturing expansion, plans to become a major provider of foundry capacity in the US and Europe and the intention to expand Intel’s use of external foundries (manufacturers that create chips for other companies) for some of its products. 

According to Goyal: “IDM 2.0 will allow us to deliver leading products to our customers by utilizing our partner ecosystem. We will also be able to manufacture chips at scale and maintain the sustained demand for semiconductor chips while offering our customers increased access to our open foundry services.” 

Looking at Intel’s Foundry Services (IFS), Goyal adds: “IFS is a critical element to restore Intel’s global leadership in the semiconductor industry. IFS will deliver silicon capability, advanced packaging capability and will be an open system foundry.  We are building a robust ecosystem with our partners to support customer innovation.” 

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Open ecosystems  

Innovation thrives in an open and democratized environment and enables forward-looking organizations to scale innovation at speed and bring that value to a much larger base. 

The idea is to unlock collective potential across multiple companies in a pre-competitive phase. As an example, Goyal points to the Universal Chiplet Interconnect Express (UCIe), an industry consortium made up of Intel, Advanced Semiconductor Engineering (ASE), AMD, Arm, Google Cloud, Meta, Microsoft, Qualcomm, Samsung and Taiwan Semiconductor Manufacturing Company. 

This consortium innovates collectively on top of a standard, which allows them to differentiate their own solutions while contributing back to the standard and promoting it over time. In addition to the innovation benefit of an open ecosystem, partnerships can help reduce the challenge of cost in the semiconductor industry.  

The cost of developing advanced technology is increasing, along with R&D. In 2022, the US semiconductor industry investment in R&D totaled $58.8 billion and annual R&D expenditure as a percent of sales has exceeded 15% over the past 20 years, according to SIA. 

As a result, it’s become exceedingly difficult for one company to make waves in the semiconductor space without embracing a partner and industry ecosystem mindset. 

Shaping a future of responsible innovation 

Just as the semiconductor shaped the internet boom with the birth of the microprocessor and personal computer, these same, albeit more advanced, silicon chips will define a future in the cloud and at the edge. They will bring value to almost every touchpoint in a person’s life, from cars to computers and medical devices. 

In this digital era that’s reliant on super-fast connectivity, high performance compute will become critical. Consumers and organizations will expect the power of cloud on handheld devices, enabling innovation and collaboration on the go.  

The immense possibilities of AI also rely on advanced semiconductor chips. But beyond meeting demand, chip manufacturers and those building large language models (LLMs) need to consider the responsible use of the technology. 

“In shaping a silicon-led future, we must make sure that we continue to innovate in a responsible and resilient manner to ensure the trust of our customers,” says Goyal. 

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