Welcome to the Siliconomy : By Intel

 Humans possess a continuous drive for improvement, leading to an ever-growing opportunity for technology. Silicon feeds a $574 billion industry that powers a global tech economy worth about $8 trillion — and the digital economy, on its own, accounts for more than 15% of the global GDP.

AI represents a generational shift in computing that’s giving rise to what we dubbed the Siliconomy during the Intel Innovation 2023 event on Sept. 19-20. It’s a new era powered by silicon, where semiconductors are essential to maintaining and enabling modern economies. With that comes unprecedented challenges and the opportunity to create a better future for every person on the planet. Let’s look at the market dynamics and factors that feed into this concept we call Siliconomy:

Global supply chain 

The key cog to the entire ecosystem is the global supply chain — and it’s complicated. Today, 80% of the world’s semiconductors are produced in Asia. Semiconductor manufacturing that’s too concentrated in any one region can lead to extraordinary disruptions and unnecessary risks like we saw during the pandemic, leading to shortages in everything from cars to appliances. To level the playing field, Intel’s moonshot goal is to have 50% of the world’s semiconductor manufacturing in the U.S. and the E.U. by 2030. A secure and diverse supply of semiconductors is essential to the interests of the entire global economy.

Industry growth drivers  

Chip manufacturing capacity is projected to grow by more than 170% in the U.S. and double globally by 2030. For example, consider that a single electric car now requires as many as 3,000 semiconductors — and even that could double with the advent of electric and autonomous vehicles. Automotive, along with the wireless, computation, and data storage industries, are expected to account for 70% of total semiconductor growth by 2030.

Semiconductor R&D investment 

The race to develop the necessary infrastructure is on. In 2022, the U.S. semiconductor industry investment in R&D totaled $58.8 billion. Annual R&D expenditure (as a percent of sales) has exceeded 15 percent over the past 20 years. Based on the 2022 EU Industrial R&D Investment Scoreboard, the U.S. semiconductor industry is second only to the U.S. pharmaceuticals & biotechnology industry in terms of the rate of R&D spending as a percent of sales.

Job creation 

With that, the semiconductor industry has grown to employ more than 300,000 people in the U.S. alone. For each U.S. worker directly employed by the semiconductor industry, an additional 5.7 jobs are supported in the wider U.S. economy. And that’s a huge deal, as Siliconomy jobs pay a premium compared with other industries. Of Americans with bachelor's degrees, semiconductor industry workers on average earn 79% more than workers in other industries. 

Power to the people 

Still, we need to move faster and smarter if we’re going to keep up. People all over the world demand more plentiful, powerful and affordable processing power. It’s a vital component to the Siliconomy, but 64% of respondents of a commissioned study recently conducted by Forrester Consulting note that compute power is not yet what they need it to be. Demand for processing power could grow the market by $500 billion in the next 10 years, largely due to the surge in AI-related chips. As healthcare systems address pandemic-induced patient backlogs, the demand for chips in that vertical alone is expected to double by 2028. 

Environmental sustainability matters 

Finally, we must recognize that environmental sustainability is just as imperative to the Siliconomy as the economy — if not more. The way we manufacture has a direct impact on our global footprint as well as the bottom line. As semiconductor manufacturers like Intel grow their operations to meet increased demand, we’re also taking steps to make computing more sustainable. For example, we’ve avoided more than 80% of our cumulative Scope 1 and 2 greenhouse emissions over the past decade. While 62% of companies are investing in ways to reduce IT-related hardware emissions, it’s on all of us to find ways to do better and to share best practices.

The Siliconomy is everywhere. It’s inside everything — presenting tremendous opportunity along the way. Like the silicon processor that makes it all possible, it all starts with Intel. For a deeper dive into the rise of the Siliconomy, visit the following resources:

Siliconomy website

credits:IntelIQ @linkedin

Intel IQ