CPU, DRAM, Samsung, TSMC: Key terms, firms to know in global chip crisis
There’s an unprecedented crisis in the memory-chip sector. Less than a year after companies’ warnings, the $160 billion industry is suffering one of its worst routs. A glut of chips is sitting in warehouses, customers are cutting orders, and product prices have plunged. The crisis is wiping out cash for industry leaders and destabilising their suppliers.
Here’s a look at what are the different kinds of microchips and their major sources.
A microchip, also called an integrated circuit or IC, is a set of electronic circuits on a small flat piece of silicon. On the chip, transistors act as miniature electrical switches that can turn a current on or off. Chips are primarily of two categories.
Logic chips are the ‘brains’ of electronic devices: they process information to complete a task. Among logic chips, CPUs (central processing units) are the ‘original’ chips, first designed in the 1960s. But there are also processors with specific functionality in mind, such as GPUs (graphical processing units, which are optimized for visual display) and NPUs (neural processing units, designed for deep and machine learning applications).
Key players in the global logic semiconductor industry include Fujitsu Semiconductor Inc., Infineon Corporation AG, MediaTek Inc., ARM Holdings Plc, Qualcomm Incorporated, Broadcom Corporation, Marvell Technology Group, Apple Inc., Freescale Semiconductor Inc., Texas Instruments Inc.
The second kind, memory chips, store information. There are two types of memory chips: DRAM (Dynamic Random Access Memory), which are the ‘working memory’ chips that only save data while the device’s power is turned on, and NAND Flash, which saves data even after the device is turned off. For example, DRAM helps to run programmes on your device, whereas NAND stores your photos. Whereas DRAM is fast, NAND is slow to read and write data.
Taiwan Semiconductor Manufacturing Co. (TSMC) is the world’s largest memory chip manufacturer and it has single-handedly placed Taiwan on the list of the most important regions in the world. Besides TSMC, Taiwan is also home to some of the most advanced chipmaking facilities in the world, including the brand new 3-nanometer fabs that entered production in the latter half of 2022.
However, in terms of the producers of semiconductors and microchips, Japan boasts of the strongest semiconductor ecosystems in the world, with 102 chipmaking facilities operating in the country.
South Korea is the other major exporter of logic and memory chips. The country is home to two of the world’s three largest memory manufacturers: SK Hynix and Samsung. The pair collectively controlled roughly two-thirds of the global memory market as of September 2022. Samsung’s chipmaking divisions also manufacture semiconductors for other companies. Samsung Foundry is only of two companies in the world (the other being TSMC) that make chips for others with leading-edge process technologies such as 5-nanometer and now 3-nanometer.
Among other major producer centres are the United States, Germany and China, which maintain a steady balance of supply between both logic and memory chips.
All eyes are now on Samsung, which has thus far said little about the industry’s near-term prospects in the wake of the memory chip crisis. The world’s largest maker of chips, smartphones, and display panels is set to report fourth-quarter earnings on Tuesday, followed by a call during which analysts are likely to question its capacity management plans.
