All Eyes on AI: How Artificial Intelligence Could Be the Solution to Semiconductor Industry Challenges
The rise of artificial intelligence (AI) has further accelerated the digital age, where automation and efficiency have enhanced business capabilities, improving revenue streams and decision-making processes. And along with increased productivity, AI has the potential to make a big financial impact globally as well—implementing AI could contribute up to $15.7 trillion USD to the global economy in 2030, according to PwC.
In our recent blog posts, we’ve covered three current issues in the semiconductor market: the chip shortage, the shortage’s effect on the auto industry, and the skills shortage. The introduction of AI and its recent popularity provides ways to address all three and opens the door to new possibilities for the semiconductor industry. This blog post will explore the recent industry issues and how AI could potentially be the solution.
AI in the Semiconductor Industry
Businesses are continually taking advantage of AI, as its robust capabilities and extensibility prove beneficial across industries—and semiconductors are no exception. Implementing AI has already reduced production costs for semiconductors by almost 30%, enabling new distribution of funds for new materials, onboarding employees, and other critical areas.
As AI helps decrease costs, it also assists in growing revenue. Contributing $5 to $8 billion USD for semiconductor organizations every year, the AI chip market is projected to reach $119.4 billion USD in 2027. This forecast not only demonstrates AI’s ability to financially stimulate the industry, but it highlights its contribution to improving efficiency, manufacturing processes, and overall production.
How AI Can Help Overcome Current Issues
AI can be leveraged and applied in various areas, from manufacturing processes to quality control to data management, further boosting the semiconductor fab’s efficient operations. It can also solve many specific problems—let’s explore how AI can assist with each of the previously mentioned semiconductor challenges.
- Overcoming the Chip Shortage
The COVID-19 pandemic accelerated the chip shortage in 2021, creating supply chain issues throughout the industry. After the CHIPS Act was signed, the industry was still unable to satisfy the growing demand for chips, necessitating a new solution. A year later, and semiconductors were still waiting for CHIPs Act funding. Meanwhile, AI’s role in the industry grew.
AI’s predictive capabilities are both extensive and highly configurable to the industry’s needs. Able to manage large sets of data quickly, AI helps to proactively and efficiently plan for risk, enhance supply management, and improve the integrity of the products within the supply chain. As it improves supply visibility, AI can develop predictions surrounding critical events from labor strikes to transportation issues to manage potential shipping bottlenecks.
By leveraging its data analytics capabilities to gain deeper insights and uncover recommended actions, AI can also significantly reduce costs. Its projections to reduce research and design costs for semiconductors is about 28-32%. But that’s not all. AI can also improve overall production yield anywhere from 5 to 15%, assisting the industry in satisfying recent high demand.
- Addressing Automotive Issues
The automotive industry uses semiconductor chips in nearly every vehicle being produced today. As a result, it has experienced significant supply chain issues and an imbalance of inventory, requiring new systems to manage the supply chain. The introduction of AI can unlock several applications that address the inventory problem. It can address the shortage of chips needed by rapidly conducting a wide search for new chip sources, avoiding relying on one provider for materials. It can also address the current surplus by enabling supply chain managers to quickly identify potential buyers and product users.
The demand for higher-performing automotive chips is increasing, with some semiconductor companies experiencing growth of at least 40%. Today, a new car needs around 1,400-1,500 chips in order to operate, and more complex models need as many as 3,000 chips. As these models become more popular, manufacturers can leverage AI to speed up the process of finding new supply sources and onboarding them.
Additionally, switching from manual manufacturing processes to automated ones assisted by AI can mitigate production costs. Manufacturers are able to scan through large sets of data and identify the chips they need far quicker than ever before, decreasing manufacturing costs by up to 17%. AI also empowers preventative maintenance, and finds and fixes issues before they happen, thus reducing the amount of machine downtime.
- Combating the Skills Shortage
There aren’t enough semiconductor professionals to fill the current number of available jobs in the market. By leveraging data analytics and enhancing productivity on the floor, AI can help fill this gap in more ways than one. Firstly, AI can improve efficiency, speed, and innovation in the workspace itself, powering technology to manage smaller, more routine tasks. AI is able to analyze data 600 times faster than people and can troubleshoot errors, take action, and make recommendations so engineers, operators, and other team members can focus on critical tasks.
AI also enables a faster onboarding process, getting new workers on the floor faster. With the ability to create interactive simulations and training courses, new employees gain knowledge and understand their new position’s responsibilities quickly. With these new tools empowered by AI, organizations can onboard new staff at a much quicker pace, taking a step towards filling the semiconductor employment gap.
Navigating Future Innovations with an Experienced Partner
The rise of AI is exciting and overwhelming, but it won’t be the last innovation the industry will experience. In an ever-evolving sector, it is crucial to partner with an expert who can help navigate the various changes that will come to light.
For decades, customers have turned to AES for high-value gas systems engineering—including design, manufacturing, integration, and training. Our excellence permeates our products, services, and solutions, enhancing the standard of business for our semiconductor customers.
Explore our interactive infographic to learn more about how AI can drive innovation and success in your organization.
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