2024-06-28
Due to their use in Tesla's Model 3, compound semiconductors, also called "third-generation semiconductors" or "Group III semiconductors", briefly became the hottest topic in the global tech sector. In recent years, another nascent industry besides electric vehicles that may offer new business opportunities for compound semiconductors has appeared: AI servers.
In the era of AI, deploying compound semiconductors to improve power usage effectiveness is of great importance. But what difficulties and challenges are faced by the compound semiconductors sector in terms of materials, production, and application? Below are the latest insights from Dr. Yi-Jen Chan (詹益仁), former CTO of the Delta Group's Cyntec Co., former General Director of the Electronics and Optoelectronics Research Laboratories at the Industry Technology Research Institute (ITRI), as well as a founding father of the compound semiconductor industry.
Compound semiconductors benefit from the attributes of groundbreaking materials such as gallium nitride (GaN) and silicon carbide (SiC), allowing them to be smaller, lighter, and recharged more quickly. This field took off with electric vehicles (EVs), but recently there has been more bad news than good from the EV world as the market enters its corrective phase. Fortunately, compound semiconductors have found a new wealth of opportunities with the rise of servers used for artificial intelligence (AI).
During a shareholders' meeting last year, the chairman of Delta Electronics announced that their newest 3,200W 80 PLUS Titanium server power supply utilizes components made from GaN to drastically increase energy density by 25% and improve energy efficiency from 94% to 96%.
High power consumption is a major headache for generative AI. AMD CEO Lisa Su has said that in several more years, a supercomputer might have to be powered by a nuclear reactor. Research has shown that by 2027, AI will use as much energy as the entire nation of the Netherlands.
The advent of AI means that both CPUs and GPUs will consume more and more direct current (DC) power. What was once 200-300W is now 700W, and one day it could be 1,000W or even 1,500W. Such high energy demands will have to be satisfied with power semiconductor devices.
Because the voltage requirements of CPU and GPU chips are actually low—around 0.7V—power supply units need to take 12V or 48V currents and convert them to 12V, 5V, or even 0.7V. These conversions are done through semiconductors.
When it comes to working with electric currents, power semiconductor devices made from GaN have advantages over silicon-based semiconductors.
To begin with, silicon-based semiconductors can be compared to two-lane highways; too many cars on them will slow the traffic down and decrease performance. In comparison, GaN-based semiconductors are like ten-lane highways that allow for 100-mph driving even in heavy traffic. As current drivers for CPUs and GPUs, they offer better performance due to lower electrical resistivity and a higher conversion rate.
The second advantage concerns how the transistors turn on and off during power conversion. On a GaN chip, turning off one control valve stops all traffic. Because it switches very quickly, it can use much smaller passive components. A silicon chip, however, requires a primary valve and many supporting valves. All of these must be shut off to stop the flow, complicating operations.
And yet, over the last 30 years, silicon-based semiconductors progressed by leaps and bounds while compound semiconductors treaded water. This is because they were relegated to niche markets such as defense and aerospace. Mass adoption by the commercial market has been slow in coming.
The transistors of compound semiconductors have more irregularities than silicon chips, with many minute disparities that are harder to control. The material itself is hard to work with, and the production process is beset with difficulties.
This is because the compound is made of two or three different materials that react differently to temperature changes and vaporize at disparate speeds. More importantly, the compound doesn't have a stable layer of oxygenation like silicon chips. This limits its viability in commercial use and pigeonholes it as a futuristic substance that may see broader adoption—one day. It wasn’t until power amplifiers (PA) were widely used by third-generation communications equipment that compound semiconductors shook off their ten-plus years of inactivity and basked in the spotlight once again.
Will Compound Semiconductors Create a New TSMC?
Whether compound semiconductors can give rise to a new TSMC depends on the economy of scale. Silicon-based semiconductors have the scale to support a vertical supply chain in Taiwan. However, compound semiconductors have long been the products of a niche market. It would not be feasible to try and replicate the same business model in this market; vertical integration would be a necessity. This is the biggest difference between compound semiconductors and silicon-based semiconductors.
Like the SiC chips that Tesla developed for years in its lab before putting them in the Model 3, many of the considerations come down to business strategy. The economy of scale determines the choice of components. Not everything in this supply chain can be divided into vertical slices.
Silicon-based chips have withstood the test of the mass market and inspired many new inventions, from the smartphone to the currently trending AI. From 28 nanometers to 15, 10, and 5 nm, they all have their uses. Tech innovation is driven by actual demand.
Compound semiconductors have thrived in a niche market. They don't have a guiding principle like the famous Moore's law, and neither do they have the resources of the entire world focused on solving a common problem. On top of the difficulties of working with the materials, it might also be said that Tesla was only able to put SiC chips in its cars because it was operating like a startup eager to buck the trend.
SiC chips are more expensive than mainstream alternatives. Despite this disadvantage, from the perspective of the entire system, if these pricier components can solve the issue of heat dissipation, they may be a worthwhile investment.
Tesla's use of compound semiconductors was an important first victory. In business, no one wants to be the lab rat. There is a certain psychological barrier to adopting new technology. But SiC is a proven and reliable material for making semiconductors. Once a first mover has tried using it, and all the cars outfitted with SiC semiconductors turned out to be perfectly functional, more people will get on board.
After Tesla set the precedent for working with SiC, China's BYD also got in on the action. Everyone knows that BYD uses Chinese technology for the Chinese market, so people are wondering: If the future of SiC is tied to the EV industry, and if BYD makes its own chips and cars, then what future is there for Taiwan's SiC companies?
"Third-generation semiconductors" is actually a term that came out of China. Chinese firms are heavily invested in it, the whole ecosystem is getting more and more complex, and many big companies around the world are already signing long-term contracts with them.
Chinese companies use low prices as their competitive strategy. Right now, we don't know what Taiwan's strategy is. What we do know is that we cannot use the same strategy as that of silicon semiconductors.
What Taiwan needs is more vertical integration. For example, packaging can get involved in material production. There are many technologies that can be combined. If we can do a good job with integration, we will still have opportunities.
Source： CommonWealth Magazine web-only article, 2024-04-08
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