The Brains of the Tech Industry - Semiconductors w/ Rohan AZ TRT S04 EP40 (203) 10-8-2023

The Brains of the Tech Industry - Semiconductors w/ Rohan

AZ TRT S04 EP40 (203) 10-8-2023

Things We Learned This Week

• Semiconductors (Microchips) are in so many of the common everyday devices people use: cell-phones, tablets, laptops, cars, TVs, fridge, etc
• Valuation of Pay in Tech Jobs - combo of salary, bonus, benefits, stock options & growth potential
• Carbon Neutral is the eco-goal of many tech co’s & Gov’t by 2050, will require R&D, new materials
• Tech Talk & the Future.... AI, Turing Test, Recommendation Model, Moore’s Law, & more

Guests: Rohan Raghunathan – Product Mgr – Semiconductor Industry

https://www.linkedin.com/in/rohan-raghunathan-1542a94

Rohan graduated from ASU with a degree in Electrical Engineering, and also attended Cornell Univ for his MBA. Prior to working at On Semi in 2019, he was at Pwc as a Management Consultant in tech, and a Product Engineer at Microchip. He also had his own startup called Bioscope.  

Notes:

Seg 2

What are semiconductors?

Cost of semi conductors in a standard car used to be around $100 per car. Now with modern EVs it’s around $1500 per car, about 10X the cost that it used to be.

There are probably thousands of micro chips in each car. The microchip serves as the brains behind the equipment, all electrical equipment nowadays have chips.

It’s the semiconductor micro chips and smart houses, the fridge, locks, ring doorbell. All sorts of devices have chips from an Amazon Alexa to your mobile phone to a tablet to a laptop.

What has changed in the last few years is the size of the chip in the power of the chip. Moore’s Law with technology gets more powerful and cheaper every 18 months.

Moore's law is the observation that the number of transistors in an integrated circuit (IC) doubles about every two years. Moore's law is an observation and projection of a historical trend. Rather than a law of physics, it is an empirical relationship linked to gains from experience in production.

The observation is named after Gordon Moore, the co-founder of Fairchild Semiconductor and Intel (and former CEO of the latter), who in 1965 posited a doubling every year in the number of components per integrated circuit,[a] and projected this rate of growth would continue for at least another decade. In 1975, looking forward to the next decade, he revised the forecast to doubling every two years, a compound annual growth rate (CAGR) of 41%. While Moore did not use empirical evidence in forecasting that the historical trend would continue, his prediction held since 1975 and has since become known as a "law".

https://en.wikipedia.org/wiki/Moore%27s_law

Companies like Nvidia make a very powerful microchip, that can process today’s AI needs.

Chips are made of different materials. What you’re going to see now is chips of silicon carbide that can handle 100 kW up to megawatts. This new type of material and ship will be needed for chargers and EV cars.

Chips need to be faster to handle new technologies like AI. The processing data goes so quick with these recommendation models and the software that learns.

Seg 3

Stocks and the Tech Industry

A lot of tech companies have had stocks that have gone up tenfold through the years so stock options are very common in pay for employees. You could offer the restricted stock unit which is part of the compensation. Tech industry has made tons of millionaires through the years with the biggest example being Microsoft.

How to value a company with your compensation. In this example Rohan previously was at a $45 billion market cap company. He changed jobs last year to a company that’s valued between $5 to 7 billion.

If the company is worth $40 billion, it’s very hard to 5X, and have the company grow to a valuation of $200 billion. It might have a 2X jump and be close to $80 billion.

Very hard though to grow margins and revenues, especially in the semiconductor industry which is cyclical. So it’s unlikely the company would grow 5X, especially if it’s already at an $80 billion valuation.

On the other side though for a company that’s valued at $5 billion, it could easily scale and grow 5 to 10 X in size and a value up to $50 billion.

The pay setup for many technology companies is very similar with the benefits they get like health benefits, 401(k) retirement benefits, and health savings account. Typically your salary is your pay, and stock part of the compensation. Also a employee stock purchase plan, restricted stock and then usually a cash bonus.

Do you want to create value as you build your career? To be better in your career, you really need to be learning yearly just to keep up with your industry. Creating value plus having specific business knowledge is the way to get ahead in your career.

Semiconductor industry is a very specific type of technology industry. They’re creating these micro chips and it takes upwards of 5 to 10 years just to develop the chip and its power output. Then it could take even longer for the fine-tuning and testing.

Seg 4

What is the future of semiconductor industry?

AI is currently the biggest thing in the technology industry and what will happen with  automated software the next few years. Taiwan semiconductor or TSMC is working on a sub 10 nm chip. Also the advances in artificial general intelligence.

AI is trying to determine if it can pass the Turing test. This is a set of questions created by Alan Turing considered the original computer engineer from the 1940s. You’re basically having a human versus a computer and through this list of questions you can judge whether it’s a human or a computer or giving me answers. If you can’t determine that then the computer has passed the Turing test and hasn’t shaved intelligence.

The Turing test, originally called the imitation game by Alan Turing in 1950,[2] is a test of a machine's ability to exhibit intelligent behaviour equivalent to, or indistinguishable from, that of a human.

https://en.wikipedia.org/wiki/Turing_test

What are you seeing with AI it’s broken Moore’s law and things are moving faster.

Technology is dealing with the issue of what carbon footprint it leaves as it grows. Many governments have created a mandate to be carbon neutral by 2050. Energy is a big part of this and the transition to clean energy. Major example is electric vehicles.

The natural resources for chips and batteries may not be the best for a future of clean energy. There is a lot of R&D in technology right now to build better batteries and even recyclable materials.

Currently using lithium ion, or cobalt and silicon which is just sand. Also other rare earth elements and common materials like silver.

Electrification of heavy equipment over time, like trains, trucks and construction vehicles will add to more clean energy. The next wave is battery technology charging stations.

The expectation is they will use more material like silicon carbide.

Silicon carbide (SiC), also known as carborundum (/ˌkɑːrbəˈrʌndəm/), is a hard chemical compound containing silicon and carbon. A semiconductor, it occurs in nature as the extremely rare mineral moissanite, but has been mass-produced as a powder and crystal since 1893 for use as an abrasive. Grains of silicon carbide can be bonded together by sintering to form very hard ceramics that are widely used in applications requiring high endurance, such as car brakes, car clutches and ceramic plates in bulletproof vests. Large single crystals of silicon carbide can be grown by the Lely method and they can be cut into gems known as synthetic moissanite.

Electronic applications of silicon carbide such as light-emitting diodes (LEDs) and detectors in early radios were first demonstrated around 1907. SiC is used in semiconductor electronics devices that operate at high temperatures or high voltages, or both.

More on Semiconductors: https://en.wikipedia.org/wiki/Semiconductor

Seg. 1 - Clip from Rohan’s first appearance

Semiconductors & Cars w/ Rohan of On Semi

- BRT S03 EP12 (111) 3-20-2022

Things We Learned This Week

·         Onsemi & Fresscale were a spinoff of Motorola, IPO in 2000

• Onsemi makes tech for cars, power steering and AI sensors, plus more

·         Many Tech and Car Co’s in Phoenix area: Rivian, Lucid, Atlas, Nicola, Intel, Onsemi, Microchip

·         AZ State has advantages that recruit these Tech Co’s - weather, government subsidies, low regs, no natural disasters, no disruption to supply chain

·         Chip Supply Chain issues – dates back pre-pandemic, circa 2019, did not keep up with demand, especially cars

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