Impact of Cloud Computing on Semiconductor Industry and Nanotechnology

We all know what Semiconductors are. Semiconductor materials have intermediate conductivity between conductors and insulators. Silicon and Germanium are examples of semiconductor materials.  If you want to know the basics of semiconductors, this site should be very helpful to you. http://www.wsi.tum.de/Institute/Scientificbackground/AnIntroductiontoSemiconductors/tabid/65/Default.aspx
There are three most commonly used semiconductor devices, namely diodes, transistors and integrated circuits.These devices together are essentially the building blocks and brains of almost all electronic devices such as computers, mobile phone, electronic appliances etc. The CPU in your computer and smartphone uses microchips that are made of silicone semiconductor. Below is a picture of such a microchip (http://www.topnews.in/chip-vendors-track-losses-299220)

Here is a video that would give you a comprehensive view of this very important sector that has been a growth factor for many industries and accounts for 10% of global GDP.

The biggest name in semiconductor industry is Intel. Some of the other important firms are AMD in PC chips market and ARM that holds 95% market share in the global mobile phone chip market. The diagram below summarizes the 2011 global MPU market share:

Cloud computing, as we have seen previously, will transfer end users' ICT need to the clouds and thus will lower the demand of client storage facilities. Number of servers will be consolidated in a cloud and usage of desktops will be reduced. Will such phenomenon affect the semiconductor industry negatively? Let's find out.

The server market (http://www.gsaglobal.org/events/2011/0908/docs/GSA_Octane_PPT_web.pdf)
is projected to see a medium growth because of the emergence of cloud computing. While the need of building data centers to facilitate cloud capabilities and initial duplication will drive the demand of servers, virtualization effect will lead lowered demand of servers. Thus the net effect would be a medium growth of server market that in turn would add to the growth of semiconductor industry.

Demand for desktops will continue to go down because of the availability of mobile models. Even though this shrinkage is not entirely due to the cloud computing, the growth in demand of cloud-driven mini notebooks does facilitate this shrinkage. Improved LAN/WAN connectivity in low end PCs facilitates cloud computing and thus the demand for low end PCs will go up. Thus the net effect will be very high demand of cloud driven mini notebooks and low end PCs, that in turn will spur the further growth of semiconductor industry.

3G and 4G technology increased the global availability of mobile cloud services (http://www.gsaglobal.org/events/2011/0908/docs/GSA_Octane_PPT_web.pdf). Here is a video that talks about this phenomenon:

Smartphones offer better interfaces than that of PCs and will represent 60% of mobile chip market in 2013. Such projections indicate high projected growth in the mobile chip industry.

With the widespread usage of cloud, communication infrastructure will increase manifold that in turn would lead to high demand in semiconductor industry.

Need of high security measures will facilitate growth in secure network and storage systems that in turn would lead to building better network paths. This phenomenon would also increase the demand in semiconductor industry. Thus positive growth in storage infrastructure and consumer devices would lead to higher demand for semiconductor chips. As I have discussed before, only client server market will see a negative demand curve. Thus the overall effect of cloud computing on semiconductor industry is positive and cloud computing would be one of the major drivers for innovations in electronic industry hence in semiconductor industry.
Sergis Mushell, research analyst for Gartner research, summarizes (http://www.gsaglobal.org/events/2011/0908/docs/GSA_Octane_PPT_web.pdf) these finding in the following table:

Nanotechnology sector is very closely related to semiconductor industry, alternative energy industry and biotechnology industry. Since its inception, nanotechnology industry has worked towards increasing the efficiency of semiconductor chips by introducing new materials such as carbon nanotubes and graphene. Below is a picture of such carbon based materials.

I have worked with single walled carbon nanotubes extensively as a researcher. In my opinion, needs of cloud computing sector would drive innovations in the nanotechnology sector as well. Let me introduce my opinions before I finish this post.

As evident from our discussion on cloud computing so far, to be attractive, cloud computing would need to be fast and reliable. Thus cloud servers which are used by many users at the same time, would need to be more efficient. They would need to use chips that are not only lightweight and small, but also are energy efficient in the sense that they would need to generate less heat and consume less energy. Silicon based semiconductor industry has followed Moore's law successfully so far that essentially says number of transistors that can be placed on ICs can be doubled in every two years without increasing the cost but increasing the efficiency of the ICs. Today, the transistors are at the 32 nm level (2.3 billion transistors placed 32 nm apart). After it reaches 16 nm level (where electrons will travel between 200 atoms), it can not be made smaller anymore because then it will approach a single atomic layer of silicon. Here is a video that will explain the end of Moore's Law:

Graphene which is one-atom-thick layer of carbon, conduct electricity 30 times faster (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/20/BUV81KPF77.DTL) than silicon.Semiconductors made of this material would not only speed up the computer but also would consume very little energy. Scientists predict a very new type of transistors can be produced using this materials. Similar phenomenon are expected from single walled carbon nanotubes as well (http://www.eet.bme.hu/~mizsei/Nanoelektronika/nanotubesemi.pdf).

Thus I believe demand of efficiency, reliability and availability of cloud computing would encourage semiconductor companies to experiment with these new materials that in turn would lead to achieving the full potential of nanotechnology. Firms such as Intel and IBM with history of futuristic research are deploying substantial resources towards finding new materials in their purest form to facilitate the growth of nanotechnology. Such efforts will lead to new innovations in material science and nanotechnology which in turn will change the current landscape of semiconductor industry and future cloud computing sector.