The future of ecommerce by air may be in doubt – but the semiconductor industry, boosted by high demand for AI, is one major growth area for airlines.
The sector saw sales rise 19.1% in 2024, and January’s sales were up nearly 18% year on year, according to the Semiconductor Industry Association (SIA). Forecasts for the year suggest a 15% increase.
The industry is also in the process of ramping up production in new locations, with the US CHIPS Act incentivising domestic manufacturing – projected to triple by 2032.
“This growth trajectory underscores the escalating need for efficient and secure transportation solutions for semiconductor components,” explained Mark Drusch, chief officer cargo of Qatar Airways Cargo.
“The increasing reliance on semiconductors across various sectors, including consumer electronics, automotive, industrial applications, AI, and the Internet of Things (IoT), has amplified the demand for reliable logistics services.”
The carrier announced last week it had designed a product, TechLift, for specialised handling of these shipments, providing protection for the electronics with targeted shock absorption and climate control.
Developed “in hand” with key customers, QR Cargo claims it is the only product of its kind in the market.
“Moving semiconductors across the globe is a delicate and complex task, filled with challenges that require careful planning and precision,” Mr Drusch told The Loadstar. “These tiny yet powerful components are highly sensitive to temperature and humidity fluctuations. Even the slightest environmental change can damage a microchip, making climate-controlled transportation essential. They are also vulnerable to electrostatic discharge (ESD), meaning they need specialised anti-static packaging and handling procedures to prevent damage.”
They are also fragile, and must be protected from sudden movements, shock and vibrations, requiring shock-absorbent packaging and gentle handling. They are also expensive.
The global semiconductor industry, meanwhile, is undergoing significant change as governments look to shore up local production. Taiwan and South Korea have been major manufacturing centres, with companies like Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung, while Japan produces materials and equipment for the industry. Malaysia and Vietnam are now emerging as significant players in assembly, testing and packaging, said Mr Drusch.
But perhaps the most interesting developments are in the US – and possibly Europe. The US brought in the CHIPS Act under the Biden administration, a programme which incentivised companies to build manufacturing facilities on US soil. And it has worked; billions are now being spent in development. Nvidia is investing “hundreds of billions” in US chip-making, while TSMC’s plans include a $100bn investment to build five fabrication plants in Arizona.
“This expansion represents one of the largest foreign direct investments in US history and is expected to significantly boost domestic chip production,” said Mr Drusch.
SpaceX, Samsung, Intel, and GlobalWafers are also among those investing in US production, despite production costs being 40% to 50% higher in the US than East Asia, according to Brent Omdahl, GlobalWafers’ SVP of government affairs, necessitating some incentives.
Mr Omdahl told Area Development the CHIPS Act was “instrumental”.
“Programmes like these help level the playing field, especially for companies like ours that face high capital expenditures and thinner margins. Whether through tax incentives or direct grants, these subsidies are critical for driving manufacturing back to the US. Additionally, our customers have been pushing for more regionalised supply chains, and policies like the CHIPS Act support this trend.”
However, the Trump administration believes tariffs are a more effective boost for US manufacturing than subsidies, and is considering cancelling the CHIPS Act. Area Development noted: “Despite these political headwinds, industry giants like Intel, Broadcom, and TSMC continue to expand in the US, indicating that America’s semiconductor resurgence may be too far along to reverse.
“With billions in investments, evolving policies, and increasing demand for skilled labour, the semiconductor industry’s future is unfolding now.”
In the EU, the semi-conductor industry is pushing for a new CHIPS Act, claiming the act introduced in 2023 has not boosted production, with Intel, for example, postponing plans for a factory in Germany. Nine countries have joined the Semicon Coalition, which is looking to change the process by which member states provide funding, increase production capability, and provide additional training.
Mr Drusch added: “Supply chain disruptions are another constant worry. Geopolitical tensions, natural disasters, and global crises like Covid have all shown how vulnerable semiconductor logistics can be. To mitigate these risks, companies are diversifying their supply chains, exploring alternative transport routes, and investing in regional production facilities.
“These developments reflect a broader trend of bolstering domestic semiconductor manufacturing in the US, creating opportunities for logistics providers like Qatar Airways Cargo’s TechLift to support the industry’s specialised transportation needs.”
He noted that the industry worked on tight schedules, “often relying on just-in-time supply chains”, and thus requiring air cargo.
“Any delay, whether due to customs clearance, transportation bottlenecks, or air cargo capacity shortages, can have costly ripple effects across industries that depend on these chips.”
“Moving semiconductors isn’t just about getting them from point A to point B. It’s about precision, security, compliance, and timing – all while balancing cost, efficiency, and sustainability in a highly competitive global market.”
Source: By Alex Lennane, The Loadstar
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