Visualizing The Global Semiconductor Supply Chain
Our digitally-driven society is powered by an extremely robust semiconductor supply chain, and until the COVID-19 pandemic, not many people thought about it.
But a sudden surge in demand for digital goods, improved technologies, and recovering economies put the strain and spotlight directly on semiconductors.
The millions of digital devices we use, from smartphones to electric cars, computers, robotics, and the businesses they enable, only function thanks to the intricate chips built on semiconductors. By some estimates, up to 22.5% of global GDP is made up by the global digital economy.
This graphic from ASE Global highlights the complex and global semiconductor supply chain that powers our modern world.
How Important are Semiconductors and Chips?
Fully understanding the importance of semiconductors to the modern world is sometimes tricky, especially when the devices themselves are so small.
But a semiconductor device—also known as an integrated circuit (IC) or chip—actually contains many smaller circuits comprised of millions of transistors, all packed onto a few millimeters of silicon (the semiconductor).
These semiconductor devices allow electronics to make computations, and in essence, function and operate. That makes them vital for modern electronics, with semiconductors being the fourth-most traded product in the world behind crude oil, motor vehicle parts, and refined oil.
Here’s a breakdown of different applications of semiconductor devices by market sizes in 2019:
|Semiconductor Applications by Market (2019)||Market Size|
|Servers, Data Centers, Storage||14.6%|
Modern smartphones, for example, utilize semiconductor devices with many different smaller integrated circuits for different functions. For example, these modern chips can include the phone’s CPU, GPU, neural processing, and image processing cores.
And as the recent strain on automotive manufacturing demonstrated, semiconductors are even vital for vehicles. Cars are packed with up to 1,400 semiconductor devices controlling everything from airbags to the engine, and electric vehicles utilize even more.
What the Semiconductor Supply Chain Looks Like
So how do these complex devices make their way from concept to your devices?
An integrated semiconductor supply chain that involves thousands of companies, millions of people, and billions of dollars. The chain can be broken up into stages which happen across the globe, better known as the foundry model:
- Design: Semiconductor chip designs are created for specific or general device usage.
- Manufacturing (Front End): Silicon wafers are processed through an extensive series of manufacturing steps then diced into multiple chips (also called dies or devices).
- Manufacturing (Back End): Chips are layered and assembled into packages that can be mounted onto circuit boards. Packaged chips are then tested under different electrical and temperature conditions.
- End Product Integration: Chips are integrated by electronics and equipment manufacturers to create end products for consumers.
- Consumption: End products are shipped to companies, retailer, and consumers worldwide.
The entire process, from starting design and production to end product integration, takes months. But in the end, those manufactured chips end up in smartphones, computers, cars, servers, smart homes, and other technology all around the globe.
Different Types of Companies in Semiconductor Manufacturing
In 2020, despite an economic slowdown from the pandemic, an estimated 1.4 trillion semiconductor chip units were shipped around the globe.
Those chips were manufactured by many types of companies that occupy different parts of the supply chain. Some are household names in electronics, while others are lesser-known manufacturing stage companies responsible for most of the world’s chip consumption.
These companies operate under the foundry model, which is also known as fabless design. The model outsources different stages of production to specialized companies:
- Fabless semiconductor companies and electronics manufacturers (and independent design companies) create the design and specifications required for their chips.
- Foundries are contracted to manufacture the designed chips.
- OSAT (outsourced semiconductor assembly & test) companies assemble, package, and test the chips for consumption. ASE Global is the market leader in assembly and testing services, capturing 30% of the global OSAT market in 2021.
- OEM (original equipment manufacturers) and contracted EMS (electronics manufacturing service) companies integrate the packaged chip into devices. ASE Global is also a leading EMS provider, and over the course of the company’s history, has helped manufacture more than three trillion chips.
- Devices are then sold by the fabless companies and electronics manufacturers at the start of the chain.
At the same time, there are also IDMs (integrated device manufacturers) that design, manufacture and sell their own chips. This was the traditional model of chip development and IDMS generally weren’t considered a part of the foundry model, but many IDMs now outsource part of their production cycles as well.
Unlocking the Potential of the Digital Economy
The companies that make up the semiconductor supply chain are spread all over the globe, from the U.S. to China, South Korea, Taiwan, and Germany. A finished chip can contain components that have traveled more than 25,000 miles by the time of final product integration.
It’s a complicated but necessary supply chain that empowers the technology of the present and the future. From advances in 5G and AI to smart factories and advances in automotive and quantum computing, the companies in the semiconductor supply chain make it all possible.
Visualizing America’s Electric Vehicle Future
The U.S. is accelerating its transition to electric vehicles but obtaining the minerals and metals required for EVs remains a challenge. In this infographic, we explore America’s transportation future.
Visualizing America’s Electric Vehicle Future
The U.S. is accelerating its transition to electric vehicles (EV) to address climate change. However, obtaining the minerals and metals required for EV batteries remains a challenge.
Then, we look at how this strategy could be fueled by domestic mining and battery recycling.
The All-Electric America
Gasoline-powered cars are one of the biggest sources of carbon pollution driving the climate crisis. As a result, the Biden Administration has set a target for EVs to make up 50% of all new car sales in the U.S. by 2030. Today, fewer than 1% of the country’s 250 million vehicles are electric.
In November 2021, Congress passed the Bipartisan Infrastructure Deal, which includes:
- Replacing the government’s 650,000 vehicle motor pool with EVs.
- Electrifying 20% of the country’s 500,000 school buses.
- Investing $7.5 billion to build out a network of 500,000 electric vehicle chargers across the country.
The idea also has popular support. According to a poll, 55% of voters in the U.S. support requiring all new cars sold in their state to be electric starting in 2030.
However, rising EV sales are already driving demand for battery metals such as nickel, lithium, and copper, threatening to trigger a shortage of these key raw materials. So, does the U.S. have the raw materials needed to meet this rising demand?
Currently, the U.S. is import-dependent with large parts of the battery supply chain captured by China. Likewise, some essential metals for EVs are currently extracted from countries that have poor labor standards and high CO2 footprints.
Nickel in the Land of Opportunity
The Biden Administration’s 100-day review of critical supply chains recommended the government should prioritize investing in nickel processing capability.
Today, the only operating nickel mine in the U.S., the Eagle Mine in Michigan, ships its concentrates abroad for refining and is scheduled to close in 2025.
To fill the supply gap, Talon Metals is developing the Tamarack Nickel Project in Minnesota, the only high-grade development-stage nickel mine in the country. Tesla has recently signed an agreement to purchase 75,000 metric tonnes of nickel in concentrate from Tamarack.
Since the development and construction of a mine can take many years, recycling is considered an essential source of raw material for EVs.
The Role of Battery Recycling
Battery recycling could meet up to 30% of nickel and 80% of cobalt usage in electric vehicles by the end of the decade.
The bipartisan $1.2 trillion infrastructure bill already sets aside $6 billion for developing battery materials processing capacity in the United States.
By 2030, the U.S. alone is projected to have more than 218,000 tonnes of EV battery manufacturing scrap and 313,000 tonnes of end-of-life EV batteries per year, presenting a massive opportunity for recycling. Currently, Li-Cycle, a leading lithium-ion battery recycler in North America, can process up to 10,000 tonnes of battery material per year—and this capacity is set to grow to up to 30,000 tonnes by the end of 2022.
Li-Cycle also has a hydrometallurgy refinement hub under construction in Rochester, New York, which will process up to the equivalent of 225,000 EV batteries annually into battery-grade lithium, nickel, and cobalt when it is operational in 2023.
America’s Electric Vehicle Future
The auto industry’s future “is electric, and there’s no turning back,” according to President Biden. It’s expected that EV sales in the U.S. will grow from around 500,000 vehicles in 2021 to over 4 million in 2030.
With rising government support and consumers embracing electric vehicles, securing the supply of the materials necessary for the EV revolution will remain a top priority for the country.
Retirement Spending: How Much Do Americans Plan to Spend Annually?
Retirement expenses can vary significantly from person to person. In this graphic, we show the range of expected retirement spending.
Americans’ Expected Annual Retirement Spending
Planning for retirement can be a daunting task. How much money will you need? What will your retirement spending look like?
It varies from person to person, based on factors like your health, outstanding expenses, and desired lifestyle. One helpful trick is to break it down into how much you estimate you’ll spend each year.
In this graphic from Personal Capital, we show the expected annual retirement spending of Americans. It’s the last in a three-part series that explores Americans’ spending and savings.
The Range of Retirement Spending
To determine how much people expect to spend, we used anonymized data from users of Personal Capital’s retirement planning tool. It’s worth noting that these users are proactive regarding financial planning. They also have a median net worth of $829,000 compared to the $122,000 median net worth of the U.S. population overall.
Here is the range of expected annual retirement spending.
|Expected Annual Retirement Spending||Percent of People|
Users are a mix of single individuals and people in a relationship. In all cases, expected retirement spending is what the household expects to spend annually.
The most commonly-cited expected spending amount is $60,000. Interestingly, this is roughly in line with what Americans spend annually on their credit cards. This suggests that people may be using their current bills to help gauge their future retirement spending.
Median spending, or the middle value when spending is ordered from lowest to highest, falls at $70,000. However, average spending is a fair amount higher at $100,000. This is because the average is calculated by adding up all the expected retirement spending amounts and dividing by the total number of users. Higher expected spending amounts, some in excess of $300,000 per year, skew the average calculation upwards.
Of course, given their higher net worth, it’s perhaps not surprising that many Personal Capital users expect to spend larger amounts in retirement. How does this compare to the general population? According to the Bureau of Labor Statistics, Americans age 65 and older spend about $48,000 per year on average.
Chances of Retirement Success
Once you’ve determined how much you’ll spend in retirement, your next step may be to wonder if your savings are on track. Based on an assessment of Personal Capital retirement planner users, here is the breakdown of people’s chance of success.
The good news: more than half of people have an 80% or better chance of meeting their retirement spending goals. This means they have sufficient financial assets and are contributing enough, regularly enough, to meet their expected spending amount. The not so good news: one in five people has a less than 50% chance of meeting their goals.
This problem is even more troublesome in the overall U.S. population. Only 50% of people have a retirement account, and the Center for Retirement Research at Boston College estimates half of today’s workers are unprepared for retirement.
Setting Your Own Retirement Spending Goals
While seeing the goals of others is a starting point, your annual retirement spending will be very specific to you. Not sure where to start?
Financial planners typically recommend that you should plan on needing 70-80% of your pre-retirement income in retirement. This is because people generally no longer have certain expenses, such as commuting or childcare costs, when they retire. However, keep in mind your expenses could be higher if you still have a mortgage, encounter unforeseen medical expenses, or want to splurge on things like travel when you retire.
It requires some upfront planning, but being realistic about your retirement spending can give you confidence in your financial future.
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