transportation

System level electromagnetic (EM) simulation is becoming increasingly important in supporting the design of smart cities, next-generation transportation and global communications systems. CEMWorks' develops tools for electromagnetic field simulation that overcomes limitations in today’s solvers.

System level electromagnetic (EM) simulation is becoming an increasingly important technology needed to support the design of next-generation smart cities and transportation as well as global communications systems. CEMWorks is on the cutting edge of EM in-house simulation research.

U.S. consumers are flush with cash, the American economy is hurtling back from the depths of the COVID-19 pandemic, and the semiconductor industry is flying high on skyrocketing chip demand, with chip equities soaring since the initial outbreak in early 2020 as virus outbreaks worldwide supercharged demand for the digitization of everything from factories to home offices. “Wow, what a difference a year makes,” said Jennie Raubacher, Global Head of Semiconductor Electronics Investment Banking at Wells Fargo, speaking at a recent SEMI webinar. The two rounds of government stimulus payments in 2020 and 2021 gave many U.S. households the safety net to withstand the heaviest blows dealt by the COVID-19 pandemic and stoked consumer spending that has helped lift a hobbled economy. Durable goods spending in the U.S. has also seen a sharp rebound, surging more than 60% from its April 2020 trough, Raubacher said. The twin forces have driven a blistering U.S. economic recovery after GDP shrunk about 10% by the second quarter of 2020 only to bounce back in the first quarter of this year to roughly $19 trillion, regaining the lost ground to match the GDP charted at the end of 2019. With the U.S. economy continuing to gain steam, inflation has, as expected, edged higher, with price increases particularly acute in used vehicle and lumber markets. Despite surging prices, Wells Fargo sees inflation moderating as durable goods demand slows, easing pressure on interest rates, Raubacher said. Equity Valuations at Record Highs Heady semiconductor stock prices are not new. Over the past 15 years, equity prices of chip companies in the S P 500 have grown more than 460%, outpacing the 230% jump in value of the S P 500 index overall, Raubacher said. And chip stocks continue to shine. Since early 2020, when the spread of COVID-19 hit its rapid clip, the recognition of the growing importance of chips to economies around the world has exploded. That dynamic joined secular technology trends including autonomous driving development, industrial and factory automation, 5G infrastructure buildouts, data center expansions, and smart city and smart home innovation fueled by the Internet of Things (IoT) as key drivers of semiconductor stock valuations. With its price/earnings (PE) ratio now at more than 21x, the S P 500 is well above its historical average of 15x PE. “The S P 500 valuation is at record high any way you look at it, and valuation multiples across the board, currently at 3x Next Twelve Months revenue, have increased dramatically from historical averages,” Raubacher said. Semiconductor stock valuations are on similar trajectory, with the SOXX index now at 15x Next Twelve Months EBITDA (earnings before interest, taxes, depreciation and amortization). “While semiconductor stocks may seem highly valued compared to historical levels, the chip industry has grown faster and expanded profitability by a wider margin than S P 500 companies,” Raubacher said. With that differential, “semiconductor equities are not as expensive as they may seem at first glance.” Earnings expansion and valuation multiple increases for the chip industry over the past 15 years have translated into a more than 500% jump in market capitalization, compared to a 300% increase for the S P 500 excluding chip companies, she said. Chip company revenue growth in the first quarter of 2021 was predictably low due to seasonality, dipping 2.4%, though dropped less than the historical average, Raubacher said. Second-quarter revenue growth for the industry is expected to hew to the historical average of 6%. Semiconductor growth forecasts by market analysts for 2021 range widely from 6% to 17% year-over-year, she added. Chip Companies Raise Capital at Record Pace In 2020 and 2021, semiconductor companies have raised an unprecedented $82 billion in capital to finance maturing debt and acquisitions, a wave that will “likely catalyze further consolidation in the sector,” Raubacher said. None of the financing has stemmed from liquidity crunches. Since Raubacher joined Wells Fargo 10 years ago to lead its semiconductor practice, the group has executed more than 175 transactions including $40 billion in mergers and acquisitions and $360 billion of financing for its semiconductor industry clients. “With a strong macroeconomic backdrop and demand environment, relatively low interest rates, semiconductor companies showing strong business fundamentals and robust valuations, we expect a pickup in M A activity,” she said. Growth Forecast Across Most Semiconductor Applications The next four years will see the chip industry grow across most applications including wireless communications, consumer electronics, transportation and medical. Automotive and industrial/aerospace will lead the way, expanding at an expected compounded annual growth rate of 14% and 10%, respectively, from 2020 to 2025 to “drive a significant portion of the TAM expansion during that period,” Raubacher said. Across all applications, the semiconductor industry is expected to grow at a 6.8% CAGR from 2020 through 2025, adding $183 billion in revenue by the end of the forecast period, she said. ESG Rises in Importance For their part, investors now focus on more than pure business performance when valuing individual companies. The ability of businesses to reduce their carbon footprint, promote workplace diversity and take other steps to serve the greater good as part of Environmental, Social and Governance (ESG) programs are carrying more weight in valuation models. “Investors are paying more and more attention to ESG initiatives and targets,” Raubacher said. “On the debt side, we’re seeing things like green bonds and interest rate reductions tied to ESG targets. Only a few semiconductor companies have incorporated ESG measures into their financing, so it’s still early days. It really comes down to the metrics you can track in your companies and the goals and targets you can commit to. It will be a very company-specific approach rather than an industry standard.” In the chip industry, Raubacher noted that ESG targets are geared not only to manufacturing equipment and processes in fabs and other semiconductor facilities throughout the supply chain, but increasingly also to chips themselves. As technology innovation continues to spur the development of chips to power more electronics for consumers and businesses, their proliferation comes at a cost: greater energy consumption. The upshot is that semiconductor makers are becoming more focused than ever on power-efficient designs to bolster their ESG initiatives, Raubacher said. Many semiconductor players across the supply chain are reducing their carbon footprint by switching to energy-saving equipment and reducing water waste, Raubacher said. At the same time, more semiconductor executives are recognizing the rising importance of highlighting corporate achievements across all aspects of ESG. More Governments See Vital Importance of Semiconductors As shelter-in-place orders took hold in countries worldwide after the initial COVID-19 outbreak, work-from-home offices, online shopping, virtual classes and remote doctor’s visits became the norm. The electronics at the heart of this connectivity – born of both necessity and convenience – and the chips that power them took on outsized importance around the world. Geopolitical skirmishes intensified and supply chains across the semiconductor industry were reimagined and redrawn. Governments jockeyed for advantage in the race to build new semiconductor manufacturing facilities and upped their chip investments. An acute chip shortage that started in the automotive industry and quickly spread to other sectors magnified just how pervasive and vital semiconductors had become in making the world go round. “There’s no question that the semiconductor industry is vitally important to global and national economies as governments around the world now recognize its strategic importance,” Raubacher said. That puts the industry in an even stronger position to help lay the regulatory groundwork for its own future. “There’s a unique opportunity for semiconductor industry executives to shape the public policies that could impact the direction of the industry for the next 30 years,” she said. More than 750 people attended the June 2nd webinar, Surging Chip Demand, Digital Transformation, and the Pandemic – What’s Next?, sponsored by SEMI members Brooks Automation, Hitachi, JECT, KLA and TEL. Sven Smit of McKinsey Company also delivered his talk Leading in COVID-19 Exit at the event.

Connectivity. Electrification. Shared Mobility. Autonomous Driving. McKinsey Company cites these four disruptive trends behind future mobility — dynamics that could help to transform quality of life for hundreds of millions of people.McKinsey Company predicts that by 2030, mobility innovation could dynamically alter everything from safety in human locomotion to air quality, public spaces and power systems. Much the same way that tiny plankton in our oceans sustain aquatic animals, MEMS and sensors, while small, are crucial building blocks of integrated mobility.As partner at McKinsey Company, Andreas Breiter will explore this connection during his MSEC 2020 presentation, Future Mobility Enabled by Sensorization. SEMI recently caught up with Breiter to preview his October 7 talk at SEMI’s first virtual MEMS Sensors Executive Congress, October 6-8 and 13-15, 2020.Register now for MSEC 2020 and explore this topic with Breiter during the live Q A portion of his presentation.SEMI: You play a dual role at McKinsey Company, advising clients in advanced industries on capital investments and serving on the leadership team of the McKinsey Center for Future Mobility (MCFM). What is the relationship between them?Breiter: Mobility has become so much more than the auto sector. Today when we say future mobility, we’re talking about the convergence of many exciting developments influencing the ways that people and goods move around. Cars have become computers, and we now have to contemplate new frontiers, such as air taxis and electric vehicle infrastructure.Mobility is changing so quickly that it’s inspiring decision-makers from other market sectors to explore what implications it will have for them. We’re helping mining companies think about their haulers, retailers think about their footprints, and insurance companies plan for autonomous vehicles. The MCFM exists as a global think tank to focus on these frontier topics, helping to ensure we are ready for the future. During my MSEC presentation, I’ll explore how those future topics are influencing automotive mobility in the short- and long-term. The MCFM is even more forward-looking, so we’re just starting to build scenarios for what might come in 2040 and beyond.SEMI: How are changes in the mobility ecosystem affecting the automotive value chain?Breiter: In the past, the automotive value chain was clearly structured. We had sensor companies selling to Tier 1 suppliers, who would in turn sell to OEMs, who would sell directly to end customers.The value chain has grown more complex, however. In the future, we might see fleets of robotaxis, which will be owned by companies instead of by individual consumers. Already today, rideshare companies are game-changers because consumers can travel by car without owning one.Plus we see companies offer parts of the user experience such as user interfaces for automotive infotainment. In the past, everything in the car was branded by the OEM, but now we have third-party platforms that let us control some of our automotive infotainment options.SEMI: How are MEMS and sensors suppliers participating in this new value chain?Breiter: The pervasive use of sensors in cars has driven automotive OEMs and Tier 1 suppliers to work directly with suppliers, whose close involvement eases the complexity of integration. Just think about the sensors used in autonomous driving. Getting that right is safety-critical.We’re also seeing suppliers go beyond the individual component level to provide complete systems-level solutions. Advanced driver-assistance systems (ADAS) are a good example.SEMI: Automotive applications tends to have some of the longest design-to-delivery cycles in industry. Will this ever change?Breiter: The automotive product lifecycle was typically five-plus years, with a few years of development before that and continued service after the end of the lifecycle. That gives MEMS and sensors suppliers a 10+ year timeline on one model.With so much innovation taking place, this slow cycle won’t work forever. Over-the-air (OTA) updates, for example, enable new features when they become ready for deployment. I expect we’ll see OTA updates from many end manufacturers in coming years. SEMI: What changes do you foresee in ADAS and autonomous driving?Breiter: ADAS and autonomous features will become much more common. We’ve already witnessed this progression, with introductions first in premier models and later rolling out in more affordable vehicles. Lane-change assist and rear camera followed this path and are now pretty standard. Collision avoidance, as a safety-critical feature, is likely next in line for more widespread adoption.As for fully autonomous driving, consumers will accept that only when it becomes safer than a human driving a car.SEMI: Where is the greatest opportunity in the next five years?Breiter: Electrification of vehicles is number one. When it comes to engines, we’re moving from internal combustion to hybrid and then to electric. Since OEMs are adding sensors for the battery system, for battery management, and for electric motors, this progression represents growth opportunity for sensors suppliers – in particular for hybrid vehicles that contain both powertrain technologies.But that’s not all when it comes to sensors. Outside of powertrains, new sensors are added to enable a variety of functions, including, for example, ADAS and autonomy, as well as increased interior content, such as mood lighting.SEMI: Is there anything surprising coming, sensor-wise, in mobility?Breiter: To enable intelligent traffic systems, you need to make infrastructure smarter — which brings us to sensors. We’re going to see roads and other assets in infrastructure sense the state of traffic, sense what traffic participants are doing, and support connectivity between, for example, the infrastructure, vehicles on the ground, pedestrians on walkways and drones in the air.SEMI: What would you like MSEC attendees to take away from your presentation?Breiter: We’re living in a transformative era for the mobility industry. During the last 100 years of mobility, the ecosystem barely changed. In recent years, however, we’ve seen massive technological gains, largely enabled by semiconductors, MEMS and sensors. Instead of serving as just one of many suppliers, I’d encourage MSEC attendees to anticipate future mobility challenges so they can offer solutions to OEMs and Tier 1 suppliers accordingly.For more information, visit McKinsey Center for Future Mobility. MEMS Sensors Industry Group® (MSIG), a SEMI technology community that connects the MEMS and sensors supply network in established and emerging markets, enables members to grow and prosper. Visit us today.Andreas Breiter leads McKinsey’s capital-investment work for advanced industries in North America as well as its Center for Future Mobility on the West Coast. In his advisory work, Breiter serves a broad range of companies in the automotive sector, including car and truck manufacturers and their suppliers, as well as companies in the utilities and renewables space. He helps executives make strategic choices around product development and helps companies stay ahead of emerging trends, such as autonomous driving, connectivity, electric vehicles, and shared mobility.Andreas holds a Ph.D. in Operations Management and studied in Germany, France, the U.S. and Canada.Nishita Rao is product marketing manager at SEMI.

As the COVID-19 quarantine-related restrictions for commerce and transportation are lifted in the Philippines, companies are dusting off desks, cleaning coffee mugs, warming up equipment and gradually bringing back staff to resume full operations. Of primary interest to manufacturing companies like Microchip Technology Philippines are the restrictions on the allowable workforce, the movement of personnel, transportation, and health and safety protocols affecting factory staffing, materials availability, and the ability to ship products. In the Philippines, these restrictions started to scale back in mid-May and are staged to continue in a series of continuing reductions every two weeks through the end of June. As business operations recover, challenges remain in managing the workforce, negotiating the supply chain and understanding the expenses required to operate under the “new norm” while Business Continuity Plans continue to be reviewed and revised.Here are some of the more important business-related elements of the quarantine levels enacted by the Philippines:Enhanced Community Quarantine (ECQ): In effect from March 17 through May 15, 2020, this was the initial lockdown with the strictest requirements, most notably requiring the general population to stay at home, imposing curfews, prohibiting all public gatherings including schools, halting public transportation and banning air travel while allowing cargo flights, skeletal workforces (~15%) for essential businesses (BPOs, IT and exporters, for example) and travel using some private vehicles with varying types of passes required to clear checkpoints.Modified Enhanced Community Quarantine (MECQ): In effect from May 16 through May 31, 2020, this was the first stage to ease control to allow up to 50% of employees to return to work at essential businesses. The easing also allowed gatherings of up to five people while maintaining most other restrictions.General Community Quarantine (GCQ): In effect from June 1 through June 15, 2020, essential businesses are allowed to resume full operations within health and safety protocols in place for physical distancing, disinfection and the wearing of Personal Protection equipment (PPE). Air travel is allowed to resume while public transportation remains restricted until June 21, 2020. Company shuttles are allowed for point-to-point services.Modified General Community Quarantine (MGCQ): Planned for June 16 through June 30, 2020, this is the transition phase to the “new normal,” which will continue easing the restrictions for contact-related businesses such as barbershops, salons, restaurants and the like. Movement and public transportation will remain restricted until June 22, at which point the last obstacle for businesses to fully resume operations will fall.While some larger companies during the most restrictive ECQ were able to house staff on site or nearby in skeletal crews, some smaller companies were unable to do so and may never recover from the loss in revenue or from the loss of employees. The majority of companies in the technoparks shut down under the ECQ and were rendered powerless to return workers to factories. For factories allowed to house employees on site, a huge effort was required to provide emergency transportation, accommodations, food and drinking water, toiletries, Wi-Fi, and even entertainment for the sequestered staff – all while maintaining health and safety protocols for physical distancing and disinfection. For example, Microchip Technology Philippines was able to build temporary sleeping cubicles and showers; to buy tents, foam mattresses, bedding and personal hygiene kits; to provide canteen and laundry services; and to allow Wi-Fi access for employees to stay connected to family and friends.Microchip Technology’s 11 Guiding Values help to define our corporate culture and guide our decision-making. One key Guiding Value on display as we’ve transitioned through the levels of quarantine due to the COVID-19 pandemic has been that Employees Are Our Greatest Strength. Exercising this Guiding Value has supported the expenses necessary to provide the safest, most comfortable living accommodations in the factory conference rooms, hallways, basement, and even in office cubicles.While many larger companies in the Philippines provide company shuttles at pre-established pick-up points, limited public transportation strands many workers at home with no way to reach to their assigned shuttle. To address this challenge, solutions including van brigades that can navigate narrow village streets to pick up workers should be considered though at an additional, unplanned expense. The physical distancing rules effectively halves the number of riders, which in turn requires a doubling of the shuttle buses, most of which are under lease. If shuttle bus leasing companies cannot provide more buses, employees who can work from home should continue to do so or drive to shuttle stops if they have personal vehicles. Leasing these additional shuttle buses was in no company’s budget as we began 2020.Additional measures under the new norm will be expensive – perhaps prohibitively so – for smaller companies that cannot afford to double the number of company transports due to physical spacing rules requiring them to halve workplace capacity, whose workplace environments cannot support physical distancing, and whose treasuries cannot afford to buy rapid test kits for employees and their families. If these smaller companies produce items critical to the supply chain, larger companies will feel the sting – and cease producing specific products during the qualification of an alternate supplier. Until the Bureau of Customs and staffing of third-party logistic providers is back to normal, and until ports are running at full force, materials and exports will continue to be delayed, potentially limiting the number of employees needed to return to work to run production.It has been very expensive for companies to survive through these levels of quarantine while keeping factories and employees in a state of readiness to return to work. Additional expenses will be borne for compliance to the new norm. As many businesses recover under the new norm, they’ll undoubtedly take a closer look at their business continuity planning, if any such plans exist, and if not, they should be created without hesitation.The problem with a typical business continuity plan is it tends to focus on one or a few concurrent major events – say, flooding or a power failure due to a typhoon – but it’s doubtful any plan took into account a global pandemic that affected so many factors simultaneously including workforces, supply chains, transportation, logistics and food supplies. As we return to work, we’ll have to adjust to the new workplace and embed the lessons learned during the COVID-19 pandemic into our business continuity plans. And, hopefully, we’ll never have to exercise those measures again.Greg Fisher is Managing Director at Microchip Technology Philippines.