PDF Solutions is an American multinational software and engineering services. PDF initially focused on software and systems for analytics and process optimization, particularly in helping customers bring up new semiconductor process nodes.
Why does a semiconductor company really need PDF Solutions?
Moore’s Law drives the need for new manufacturing processes every few years, each with its own yield challenges. We offer systems that assist in overcoming these challenges by enabling early learning and optimization, crucial for both manufacturers and fabless companies. As semiconductor technology has advanced, production challenges have increased due to the complexity and variability of silicon. We have expanded our offerings to help customers manage these challenges throughout the production lifecycle. Through the Exensioplatform and cloud-based data exchange, we enable smarter manufacturing and supply chain communication. This allows companies, even those without their own factories, to access vital production data and make informed decisions, thereby optimizing their operations.
How pivotal and important is this crossroads we find ourselves in right now in the semiconductor industry when compared to some of the other seismic events that have happened, such as the dot-com boom?
The semiconductor industry has seen remarkable growth over the decades, taking over 60 years to reach $500 billion in size. Now, forecasts suggest that in the next decade, it will double to over a trillion dollars. This rapid growth is driven by the increasing importance of semiconductors in everyday life as technology has evolved from military applications in the 1960s to the current AI revolution, electrification of the energy economy, and the proliferation of smart devices. These advancements have created multiple drivers of demand. For instance, AI, electric vehicles, and smart devices are now central to our daily lives, necessitating more sophisticated semiconductors. The transition to renewable energy sources like solar and wind further adds to this demand, as does the move to smarter grids and smarter devices.
What is the upcoming pain point you think PDF Solutions will be addressing for your customers, given the increased demand in the semiconductor industry?
The semiconductor industry faces the ongoing challenge of scaling manufacturing capacity to meet growing demand, a challenge we have been addressing for 25 years.
Our solutions are critical in helping the industry bring up new manufacturing nodes more efficiently. By providing advanced analytics and software, we enable engineers to optimize production processes, making the transition to new nodes smoother and more cost-effective.
Another critical pain point is the increasing demand for reliability in semiconductor products. With chips being deployed in mission-critical applications like data centers, autonomous driving, and AI, the tolerance for failure has drastically reduced. We are addressing this by developing systems and software that enhance quality control, ensuring that products meet the stringent reliability standards required in these markets. As demand grows, particularly with the projected 50% increase in data centers, the need for highly reliable semiconductors will only intensify.
Why is proactive issue detection important right now in the manufacturing process?
The complexity of manufacturing processes has increased significantly, with advanced nodes taking up to 90 days just to manufacture a wafer, and another 30 to 50 days for advanced packaging. This means that from start to finish, producing a system can take over 120 days. Detecting issues late in the process can be extremely costly, as large quantities of materials might be affected, potentially leading to losses in the hundreds of millions of dollars. Therefore, early detection is crucial for maintaining cost-effectiveness and responsiveness in manufacturing. In such a complex and lengthy process, it’s vital to identify issues as early as possible, often referred to as "shifting left" in the detection process. The challenge lies in distinguishing between differences that matter and those that don't, given the enormous volumes of data generated daily. This is where AI and machine learning become valuable, helping to prioritize which anomalies require action. Effective proactive issue detection is about being smart with the data, ensuring that only the most critical issues are addressed to avoid unnecessary disruptions.
Could you provide an example of how digital twinning can alleviate production delays?
Digital twinning is particularly useful in the manufacturing of complex systems and packages, where multiple chips, known as chiplets, are combined into a single package.
These advanced packages, used in many AI systems, offer higher performance but also come with significant risks. If a faulty chiplet is included in a package, not only is that chiplet wasted, but all the other good components in that package are wasted as well, leading to substantial losses. To mitigate this, customers are using machine learning and digital twins to model their production processes. By collecting data from every test point during manufacturing and building a digital twin, they can predict downstream issues based on upstream data. This approach allows manufacturers to be more selective about which chiplets are included in packages, ensuring better overall performance and less scrap. Ultimately, digital twinning helps customers optimize their manufacturing processes, improving efficiency and reducing waste.
What are the key forward-looking milestones that investors should be aware of when considering PDF Solutions?
There are three significant shifts happening in our industry that are critical for our customers and for us to address. First, everything is moving towards 3D, from transistor technology to complex packaging. Traditional methods of assessing chip quality by just examining the surface no longer suffice. We've anticipated these changes, making early investments, starting as early as 2016, in anticipation of the industry needs in 2024 and beyond. Our eProbe systems are designed to provide the necessary insights for navigating this 3D landscape effectively.
The second shift involves the geographic expansion of our customers' manufacturing footprints. Semiconductor manufacturing once concentrated in a few regions, is now viewed as critical to national security by many countries. This has led to a global spread in production, making our data exchange network more essential than ever. We enable customers to have real-time control over their production, regardless of location, ensuring that they can manage a globally distributed supply chain without being vulnerable to regional disruptions.
The third shift is the challenge of managing smaller, globally distributed factories. Historically, our industry relied on economies of scale, but now, with the push for localized production, smaller factories are becoming the norm. To address the lack of sufficient human capital to manage these facilities, we will need to rely heavily on AI and machine learning. This will allow us to personalize production control in a way that doesn't require a massive increase in manpower. Our customers will increasingly expect us to deliver these capabilities as they navigate this new manufacturing landscape.
Have you ever considered changing the company name, given the evolution of the term "PDF"?
We have definitely thought about it and even joked about it over the years. The name "PDF Solutions" was chosen long before the term "PDF" became synonymous with Adobe’s file format. Interestingly, my wife, who was my girlfriend at the time we chose the name, later became an executive at Adobe. Despite the occasional joke about changing the name, we've never seriously pursued it. It's one of those quirks that has become a part of our company's history and a source of humor rather than a pressing issue.
