Semiconductor demand presents professional opportunity

With the global market for semiconductors approaching $1tr there is a growing need for production facilities – and quantity surveyors can play a critical part in fulfilling this demand.

The global semiconductor industry is experiencing significant growth, with forecasts suggesting the market could rise to just under $700bn this year from $627.4bn in 2024. Moreover, the 2023 EU Chips Act was passed to stimulate public and private investment as well as increase and protect the supply of semiconductors to the European market.

Despite this positive outlook, companies across the whole supply chain are navigating a series of challenges. Geopolitical tensions, ongoing competition between the US and China and pressure from the growth in demand for chips to power AI will have a profound influence on the industry.

Most important for the construction industry, though, are the extremely high quality requirements for semiconductor production, which mean that factories are complex projects that can costs tens of billions to build.

Quantity surveyors play key role in factory construction

With growing global demand for semiconductors, and by extension factories to produce them, quantity surveyors can play a crucial role, particularly during the planning, construction and facility management phases.

These include the following responsibilities:

• cost planning, such as feasibility studies, cost-efficient planning and control, especially the construction of clean rooms, process facilities and utilities
• cost control throughout the life cycle of the project
• tendering, in particular for heating, ventilation and air conditioning, gas and water systems, contracting suppliers and subcontractors to ensure the required quality and timely completion
• project management, including coordination of participants to ensure the design complies with semiconductor manufacturing requirements
• risk analysis and budgeting contingencies for unexpected events and potential modernisation, with life-cycle budgeting for restructuring production facilities
• contract and claims management including the preparation of construction progress reports, deviation assessments, disputes resolution and claims management.
   

Project repurposing Welsh factory wins award

An excellent example of the role of Quantity Surveyors in the semiconductor industry can be found in an award-winning project in Wales. In 2022, wafer and materials supplier IQE invested significantly in a semiconductor facility in Newport.

The project aimed to establish a compound wafer foundry on the site of the former LG factory, which had been dormant for two decades. This initiative was part of the Welsh government's commitment to developing the world's first semiconductor cluster.

The benefit of the project is that it was completed on time and recognised in Wales by winning the Constructing Excellence awards.

The quantity surveyor's involvement ensured cost control and contract management, contributing to the project's success in a highly regulated and technically demanding sector. This case underscores the critical role of quantity surveyors in managing the complexities of semiconductor facility construction.

Silicon Saxony showcases coordinated expansion effort

Developments in the Germany state of Saxony show how one region is responding to semiconductor demand, and the Chips Act in particular. Joint investment by TSCM, Bosch, Infineon and NXP semiconductors in the European Semiconductor Manufacturing Company (ESMC), to be based in Dresden, aims to create an open foundry, meaning that any customer – not just one of the four shareholders – can place orders for production.

The Free State of Saxony government is supporting this development by cooperating with the industry to expand the training infrastructure proactively, which is extremely important for semiconductor companies. The aim is to guarantee the best possible conditions for the training of professionals. For example, a new training centre for electronics with a capacity of 2,200 places is being established in Dresden.

Birgit Hempel FRICS is a member of RICS’ Governing Council