We use electronic devices every day. Smartphones, computers, various sensors contain microcircuits. Microcircuits are made up of various components among which are transistors, resistors, capacitors and so on. Modern microcircuit production is based on planar semiconductor technologies. This rapid development of the industry has led to the fact that in 2019 the global semiconductor market amounted to $ 412 billion. The semiconductor industry is very expensive to manufacture. There are several industry giants in the world. This is the Korean company TSMC, Samsung Electronics, Intel.

In early 2021, Samsung Electronics announced that its 2020 operating income was $ 32.5 billion. Over the past three years, the company's profits have increased by a third. The bulk of the profit comes from semiconductors. It had sales of over $ 65 billion in 2020 and an operating profit of $ 17 billion. This means that the semiconductor business accounted for more than half of the company's total operating income last year. But Samsung Electronics' profit from semiconductor are not high. Its competitors such as Intel and Taiwanese TSMC made higher one. Last year, TSMC made a profit of $ 20 billion. This is $ 3 billion more than Samsung Electronics. However, in 2018, the Taiwanese company’s operating profit was only a third of Samsung Electronics’s profit. Today TSMC is the world's largest semiconductor company with the highest market capitalization in its industry. While the share value of South Korean tech giant Samsung Electronics has surged 50% over the past year, TSMC's share value has surged more than 100% over the same period.

Semiconductor component prices are dependent on supply and demand, making it difficult to maintain consistent operating profit in this area. Manufacturing and development costs are gigantic. Many large companies that enterprises devices (phones, laptops, etc.) cannot afford production facilities and choose a strategy where all key microelectronic components are ordered from one of the leading manufactures. For example, Apple buys processors from the Korean TSMC. Companies are fighting for the market, and this is reflected in the accelerating progress of semiconductor technology. Each company fights for the performance of their crystals, the density of the transistors and other characteristics.

In the value chain of a semiconductor crystal, development and research play a key role. R & D provides a competitive edge by transforming the battle for the market into a battle between the minds of scientists and engineers. Naturally, the R&D stage is costly and any optimization that is performed at this stage should save billions for the company.

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Among the modern tendencies is the use of artificial intelligence and machine learning. According to McKinsey analysts, this could generate $ 5 billion to $ 8 billion in profits per year before interest and taxes, and this figure will only increase. The pandemic has brought companies billions of dollars in profits due to increased demand for electronic devices. And since technologies reach a fundamental limit and grandiose solutions have not yet been invented, the main driver of the company's profit growth will be information technologies, including artificial intelligence and machine learning.

Sources:
https://www.mckinsey.com/industries/semiconductors/our-insights/scaling-ai-in-the-sector-that-enables-it-lessons-for-semiconductor-device-makers#
https://www.samsung.com/global/ir/financial-information/audited-financial-statements/

by Maria Baranova