Semiconductors are an energy technology. And they are transforming the future global energy complex, across AI, solar, electric vehicles, LEDs and other new energies. This short article summarizes our outlook for semiconductors in energy transition, the top ten points for decision-makers, and resultant opportunities across our work.
How do semiconductors work? Metals conduct electricity through a sea of delocalized electrons. By contrast, the charge carriers in semiconductors result from doping, bandgaps, the Boltzmann constant and temperatures, which feed Fermi-Dirac distributions, explained from first principles in our 20-page Overview of Semiconductors.
How do semiconductor devices work? Semiconductors can be combined so that one circuit can control another circuit. This is the basis of how computing works. But also in power electronics, MOSFETs are fast-acting digital switches, convert DC to AC in inverters, change voltage levels in DC-DC converters, and beyond.
Never bet against semiconductors!! The computing power of a chip has doubled every 18-24 months for half a century, via Moore’s Law. If you understand Planck’s equation and the Shockley-Quessier limit, then you might reasonably conclude solar efficiency can double again, as the industry transitions to heterojunction solar, then onwards to multi-junction solar, e.g., as discussed in Longi’s patents. This all means semiconductors will end up being the single most world-changing technology category from 1950-2050.
Semiconductors underpin the rise of AI, and comprise 40-50% of the total installed costs of an AI data center. AI has been the most important topic in global energy in 2024. Machine learning hinges on the semiconductors in GPUs. Our key conclusions are discussed in this video, as 150 GW of AI data centers by 2030, will underpin 1,000 TWH of internet energy consumption, in turn boosting demand for gas, gas pipelines, gas turbines, uranium, industrial cooling equipment, fiber optics, and unlocking transformative new technologies including autonomous technologies and robotics.
Semiconductors underpin the rise of solar. Solar semiconductors harness the photovoltaic effect, transforming diffuse sunlight into a direct current, which further semiconductors can invert into an AC current, then further semiconductors can transmit and distribute. Thus solar module makers are screened here. Solar costs will halve again in the next decade and solar generation will grow 15x by 2050, more than any other energy source. Note that an LED, another world-changing technology, is really just a solar module in reverse.
Semiconductors also underpin the rise of electric vehicles, as it is traction inverters that convert the direct current from batteries into high-frequency AC current, to drive electric motors. Similar semiconductors can be used to drive other electric motors c35% more efficiently, which matters for electrifying compressors, for heat pumps, and as motors absorb 15% of all useful global energy. Semis are also crucial for battery charging in EVs.
Semiconductors underpin future world-changers. Just as photovoltaic semiconductors convert light into electricity, thermoelectric semiconductors can convert heat into electricity, via the Seebeck effect, which could be a future world-changer, if efficiency improves from 2-10% today to 15-20% in future, or better (and with an interesting read-across for fuel cells). And could semis also underpin electrochemical DAC?
The supply chain for semiconductors starts with silica mining (350MTpa globally), then production of silicon metal (8.5MTpa globally) in an arc furnace; then 99.999% pure polysilicon (1MTpa globally) via the Siemens process after 80-100 hours at 600-1,100ยฐC; then production of monocrystalline polysilicon via the Czochralski method or Lely process (for SiC). Semiconductor devices are then manufactured via masking, etching and vapor deposition to deposit nm-ฮผm thick layers of ultra-pure materials, under 1 millionth of an atmosphere of pressure, which also pulls on demand for vacuum pumps.
Materials implications can be seen in the bill of materials for electronic devices. Semiconductors are really not very good conductors, even when doped (remaining 10,000x more resistive than metals), which is why a solar panel contains more copper than silicon, and digitization inextricably boosts copper demand and aluminium demand, as well as advanced polymers. Other interesting materials exposures include indium, tin and industrial gases.
Specific companies commercializing next-gen semiconductors have also been screened in our research, including wide-bandgap semiconductors such as 1-10% more efficient Silicon Carbide (SiC) (economic model here) and MOSFET manufacturers, LED lighting companies, B-TRANs from Ideal Power to improve EV efficiency, soft-switching specialists such as Hillcrest, and LPUs from Groq that could partly compete with NVIDIA’s GPUs.