Looking upstream, the semiconductor ecosystem is dependent on the availability of basic utilities such as water, natural gas, electricity, raw materials as well as chemicals, metals, plastics, specialty gases, and solvents.
The globally intertwined value chain connects a wide range of industries and sectors. The lifeblood of the ecosystem is research & development and the science of semiconductor design and manufacturing.
This knowledge can be used by companies to create device design blueprints – made with the help of dedicated software. Further, the use of Electronic Design Automation (EDA) tools, which include software, hardware, and services, is crucial to the development process to support the definition, planning, design, implementation, verification and subsequent manufacturing of semiconductor components or chips.
Highly specialised companies develop and produce the equipment, often extremely complex, which is necessary to mass-producing semiconductor chips.
In frontend manufacturing, companies undertake the lengthy and complex processing and testing of a wafer, including several hundreds of steps in cleanrooms. Contract manufacturers that do not design but carry out volume production for others are called foundries.
In backend manufacturing, the processed wafers are cut up into individual dices, and then assembled, packaged, and tested to create the final semiconductor chip. Assembling, packaging, and testing are often outsourced as a service to specialised firms, called OSATs (for Outsourced Semiconductor Assembly & Testing) or is done in-house by Integrated Device Manufacturers (IDMs).
IDMs are companies that do everything from design to manufacturing their own products.
Companies that only design chips are called fabless, as they do not have production facilities.
Downstream users include customers of semiconductor manufacturers who are integrating semiconductors into their final products, for example direct suppliers of final products (so-called Tier 1), Electronics Manufacturing Services (EMSs), and finally Original Equipment Manufacturers (OEMs). Semiconductors are not sold to end-users.