For many years, semiconductor technology progress was largely described by process nodes.

10 nm became 7 nm, then 5 nm, 3 nm and increasingly advanced transistor architectures.

But as AI accelerators, high-performance computing systems and advanced packaging continue to scale, transistor density is no longer the only factor determining system performance.

The semiconductor industry is entering a new stage in which materials, packaging, interconnects, power delivery and thermal management are becoming just as important as transistor scaling.

This transition is increasing interest in a wide range of semiconductor materials, including:

• Silicon-on-insulator (SOI) wafers
• Glass substrates
• Silicon carbide (SiC)
• Gallium nitride (GaN)
• Aluminum nitride (AlN) ceramics
• Silicon carbide ceramics
• Diamond-based heat-spreading materials
• Diamond-copper composites

These materials address different engineering challenges, but they are increasingly connected by one common driver:

AI and HPC systems require more bandwidth, higher power efficiency, denser packaging and better thermal performance.

The Semiconductor Bottleneck Is Expanding Beyond Transistors

Modern AI processors contain enormous computing resources.

However, increasing computing capability also creates several new limitations.

Two of the most important are:

data movement

and

heat removal.

An AI accelerator must continuously exchange enormous amounts of data with HBM, neighboring processors, network interfaces and storage systems.

At the same time, these devices generate increasingly concentrated heat inside advanced packages.

As a result, improving transistor performance alone is no longer sufficient.

The entire semiconductor system must be optimized.

That includes:

• optical interconnects
• advanced substrates
• HBM integration
• power conversion
• thermal interfaces
• heat spreaders
• packaging materials

This system-level transition is creating new opportunities for semiconductor materials that previously occupied relatively specialized markets.

1. Photonics SOI Is Becoming More Important for AI Interconnects

Silicon-on-insulator is not a new semiconductor material.

SOI wafers have long been used for applications such as:

• MEMS
• RF devices
• sensors
• specialty integrated circuits

However, AI infrastructure is creating another important growth opportunity:

silicon photonics.

As AI clusters become larger, traditional electrical interconnects increasingly face challenges related to:

• transmission loss
• power consumption
• bandwidth density
• signal integrity
• transmission distance

Copper interconnects remain essential, but optical communication becomes increasingly attractive as bandwidth requirements rise.

This is one reason co-packaged optics, or CPO, has received so much attention.

Instead of relying entirely on electrical connections between high-performance processors and optical modules, CPO brings optical engines closer to the switching or computing silicon.

The objective is to reduce the length of high-speed electrical connections and transfer more data optically.

SOI is one of the most important substrate platforms for silicon photonics.

Why SOI Works Well for Silicon Photonics

A typical photonics SOI wafer contains:

• a thin silicon device layer
• a buried oxide layer
• a silicon handle wafer

The top silicon layer can be patterned into optical waveguides.

The buried oxide provides optical isolation between the silicon waveguide and the underlying silicon substrate.

Common silicon photonics structures include:

• waveguides
• ring resonators
• modulators
• optical couplers
• Mach-Zehnder interferometers
• photodetector integration platforms

In many commercial photonics platforms, the silicon device layer is only a few hundred nanometers thick.

For example, approximately 220 nm silicon on a micrometer-scale buried oxide is widely used in silicon photonics.

This means that SOI wafer requirements for photonics are very different from those for MEMS or conventional RF applications.

Thickness uniformity, surface quality and BOX control become particularly important.

AI Data Centers Could Drive More Photonics-SOI Demand

The importance of silicon photonics is closely connected to the growth of AI data centers.

AI clusters require extremely high-speed communication:

inside the server

between accelerators

between racks

and increasingly

between large groups of computing systems.

As electrical communication approaches practical limits in power and bandwidth density, optical interconnect technologies are becoming more important.

This means SOI may increasingly serve not only traditional semiconductor devices but also the optical communication infrastructure surrounding AI processors.

In other words:

The AI boom is not only increasing demand for compute wafers. It is also increasing demand for the materials that move data between compute devices.

2. Glass Substrates Are Moving Closer to Advanced Packaging

Another material receiving increasing attention is glass.

Glass has been used in electronics and semiconductor manufacturing for many years.

Applications include:

• carrier wafers
• MEMS
• optical components
• temporary bonding
• display technology

But advanced packaging is creating a new opportunity:

glass core substrates and glass interposers.

Modern AI packages may combine:

• GPU or AI accelerator dies
• multiple chiplets
• HBM stacks
• interposers
• package substrates

As package dimensions increase, dimensional stability becomes increasingly important.

Traditional organic substrate materials can face challenges including:

• warpage
• thermal expansion
• fine-line patterning
• large-area dimensional control

Glass offers several attractive characteristics for these applications.

Why Glass Is Interesting for Advanced Packaging

Glass can provide:

• excellent dimensional stability
• controlled coefficient of thermal expansion
• smooth surfaces
• good electrical insulation
• compatibility with large panel processing
• potential for fine-pitch interconnect structures

One of the most important enabling technologies is:

TGV — Through Glass Via.

A TGV creates electrical connections through the thickness of a glass substrate.

After via formation, the holes can be metallized to create vertical electrical interconnects.

This makes glass potentially suitable for:

• glass interposers
• glass core substrates
• RF packages
• advanced chiplet integration
• AI accelerator packaging

However, glass packaging requires more than simply producing a glass wafer.

The full manufacturing chain can include:

glass preparation
→ precision thinning
→ TGV formation
→ metallization
→ redistribution layers
→ bonding
→ advanced packaging

The companies that can control the complete process chain may capture more value than suppliers of raw glass alone.

3. HBM Is Turning Thermal Management Into a Materials Problem

High Bandwidth Memory has become one of the defining technologies of AI hardware.

HBM improves memory bandwidth by stacking multiple DRAM dies vertically.

This allows much more data to move between memory and processors than with conventional memory architectures.

But there is an unavoidable consequence:

stacking makes thermal management more difficult.

Multiple silicon dies generate heat inside a compact vertical structure.

At the same time, HBM stacks are typically placed very close to high-power AI accelerators.

An advanced AI package may therefore contain several major thermal sources in a limited area.

Thermal performance becomes a package-level design problem.

Advanced Packaging Needs Better Heat-Spreading Materials

Traditional copper remains extremely important because of its:

• high thermal conductivity
• mature manufacturing
• low relative cost
• good machinability

However, future high-power packages may require materials with additional capabilities.

Potential materials include:

• AlN ceramics
• SiC ceramics
• Cu-Mo
• Cu-W
• CVD diamond
• Diamond-Copper composites
• advanced thermal interface materials

The key material parameters increasingly include:

• thermal conductivity
• coefficient of thermal expansion
• thermal interface resistance
• flatness
• mechanical stiffness
• reliability under thermal cycling

The thermal problem is therefore no longer solved simply by attaching a larger heat sink.

It begins much closer to the semiconductor die.

4. Why Diamond Is Returning to the Semiconductor Thermal Discussion

Diamond is receiving renewed attention because of one exceptional property:

very high thermal conductivity.

High-quality synthetic diamond can conduct heat much more effectively than many conventional thermal-management materials.

This makes diamond attractive for removing concentrated heat from high-power devices.

Potential applications include:

• AI accelerators
• HPC processors
• GaN RF devices
• power semiconductor modules
• laser systems

However, pure diamond also has disadvantages.

These include:

• high cost
• difficult machining
• difficult metallization
• challenging bonding
• limited large-area economics

As a result, researchers and material suppliers are increasingly exploring hybrid solutions.

One important example is:

Diamond-Copper Composite.

Why Diamond-Copper Is Interesting

Diamond-copper composites combine diamond particles with a copper matrix.

The goal is to achieve two properties simultaneously:

higher thermal conductivity

and

lower thermal expansion than conventional copper.

This is attractive because semiconductor packaging frequently faces a tradeoff.

Copper conducts heat well but has a relatively high coefficient of thermal expansion.

Low-CTE materials such as tungsten and molybdenum can improve dimensional stability but often reduce thermal conductivity when added to copper.

Diamond offers a different possibility because it has both:

• extremely high thermal conductivity
• very low thermal expansion

In principle, Diamond/Cu composites can therefore improve thermal conductivity while reducing CTE.

The Interface Is More Important Than the Diamond Content

A Diamond-Copper composite is not automatically high performance simply because it contains a large percentage of diamond.

The most difficult issue is the interface between:

diamond

and

copper.

Copper does not naturally bond efficiently with diamond.

Poor interface contact can create substantial thermal resistance.

This means heat cannot move efficiently from:

copper → diamond → copper.

Manufacturers therefore use interface engineering techniques involving carbide-forming elements such as:

• Ti
• Cr
• W
• Mo
• Zr

These elements can improve diamond-copper bonding.

However, the interface layer must also be carefully controlled.

If it becomes too thick, the interface itself can become a thermal barrier.

This illustrates an important trend in advanced semiconductor materials:

Future performance increasingly depends on interface engineering, not only bulk material properties.

5. SiC Remains a Major Semiconductor Material

Although AI receives enormous attention, electrification continues to drive another major semiconductor transition:

the expansion of silicon carbide power devices.

SiC has become important for applications including:

• electric vehicles
• EV traction inverters
• fast charging
• solar inverters
• energy storage
• industrial power systems
• high-voltage power conversion

Compared with conventional silicon power devices, SiC can enable:

• higher operating voltage
• higher switching frequency
• lower switching losses
• higher temperature operation
• smaller passive components

But as the SiC industry matures, the question is changing.

Several years ago, the discussion often focused on:

Can SiC replace silicon in high-power applications?

Today, the more practical question is:

How can SiC manufacturing cost be reduced?

SiC Manufacturing Is Becoming a Yield and Cost Competition

SiC substrates are difficult to manufacture.

Challenges occur throughout the processing chain:

• crystal growth
• slicing
• grinding
• lapping
• CMP
• cleaning
• epitaxy
• wafer inspection
• device fabrication

SiC is extremely hard and brittle.

This makes wafer cutting and polishing slower and more expensive than conventional silicon processing.

Substrate defects can also influence final device yield.

As SiC moves toward larger-volume manufacturing, the focus increasingly shifts toward:

• larger wafer diameters
• higher crystal quality
• lower defect density
• reduced kerf loss
• faster polishing
• improved wafer flatness
• better process yield

This means opportunities exist not only in SiC wafers themselves but throughout the SiC materials and equipment supply chain.

6. GaN Is Finding New Opportunities in AI Power Systems

Gallium nitride is another major wide-bandgap semiconductor.

GaN is particularly attractive where:

• high switching frequency
• high efficiency
• compact power conversion

are important.

AI data centers consume enormous amounts of electricity.

Reducing power conversion loss throughout the server and rack architecture is therefore increasingly valuable.

GaN devices can be used in high-frequency power conversion applications including:

• server power supplies
• DC-DC converters
• high-density power adapters
• telecommunications power systems

This creates another important connection between AI and semiconductor materials.

AI demand does not only create demand for processors.

It also increases demand for the power electronics required to operate those processors efficiently.

SiC and GaN Are More Complementary Than Competitive

SiC and GaN are often presented as competing semiconductor technologies.

In practice, they frequently address different parts of the power electronics market.

SiC performs particularly well in:

• high-voltage applications
• high-power systems
• automotive traction
• grid and industrial power

GaN is highly attractive for:

• high-frequency switching
• compact power converters
• lower-to-medium voltage applications
• data-center power electronics

The future power semiconductor market is therefore likely to use:

silicon + SiC + GaN

rather than selecting a single universal material.

7. Semiconductor Ceramics Are Becoming More Important

Another less visible but increasingly important category is advanced ceramic materials.

Semiconductor equipment relies on precision ceramics for components such as:

• wafer chucks
• heater plates
• insulating components
• plasma chamber parts
• wafer carriers
• precision stages
• vacuum components

Important materials include:

• Alumina
• Aluminum Nitride
• Silicon Carbide
• Silicon Nitride
• Yttria

Each material solves a different engineering problem.

Alumina

Alumina offers:

• excellent electrical insulation
• good chemical resistance
• high hardness
• mature processing
• relatively controlled cost

It remains one of the most widely used technical ceramics.

Aluminum Nitride

AlN is especially attractive when both:

electrical insulation

and

high thermal conductivity

are required.

This makes it useful for:

• power semiconductor substrates
• heater components
• thermal-management structures
• electronic packaging

SiC Ceramic

SiC ceramic provides:

• high stiffness
• high thermal conductivity
• low thermal expansion
• excellent wear resistance
• high-temperature stability

These characteristics make it attractive for semiconductor equipment components that must remain dimensionally stable under changing thermal conditions.

AI Is Connecting Previously Separate Materials Markets

One of the most interesting semiconductor trends is that materials that once belonged to relatively separate industries are becoming part of the same system.

Consider an advanced AI computing platform.

It may require:

SOI

for silicon photonics and optical communication.

Glass

for next-generation advanced packaging.

HBM

for high-bandwidth memory.

AlN or SiC ceramics

for thermal management and semiconductor equipment.

Diamond-based materials

for extreme heat spreading.

GaN

for high-efficiency data-center power conversion.

SiC

for high-power energy infrastructure.

These materials perform completely different functions.

But AI is connecting them through the same engineering requirements:

• more bandwidth
• greater integration
• higher power efficiency
• lower thermal resistance

From Process Scaling to System Scaling

The semiconductor industry is therefore entering a broader form of scaling.

Traditional scaling focused primarily on making transistors smaller.

Future performance improvements increasingly depend on:

**transistor scaling

• packaging scaling
• memory scaling
• optical scaling
• power scaling
• thermal scaling**

This is why advanced materials are becoming strategically important.

A faster transistor provides limited benefit if data cannot reach it quickly.

A larger AI accelerator provides limited benefit if it overheats.

More HBM provides limited benefit if packaging density becomes impossible to manage.

Advanced packaging and materials are becoming part of the performance equation.

What Semiconductor Materials Should the Industry Watch Next?

Several categories deserve particular attention.

Photonics SOI

Driven by silicon photonics, high-speed optical communication and CPO.

Glass Substrates

Driven by chiplets, HBM, large-area advanced packaging and TGV technology.

SiC

Driven by EVs, industrial power, renewable energy and high-voltage electronics.

GaN

Driven by high-frequency power conversion and data-center efficiency.

High-Thermal-Conductivity Ceramics

Driven by power density and advanced semiconductor equipment.

Diamond-Based Thermal Materials

Driven by extreme heat flux in AI, RF and high-power devices.

These materials will not replace silicon.

Instead, they will increasingly surround silicon and enable it to continue scaling at the system level.

Conclusion

The AI semiconductor revolution is becoming a materials revolution.

For decades, the industry's most important question was:

How small can we make the transistor?

That question remains important.

But it is no longer enough.

The next generation of semiconductor systems must also answer:

How quickly can data move?

How closely can multiple dies be integrated?

How efficiently can power be converted?

How quickly can heat be removed?

These questions are increasing the importance of SOI wafers, glass substrates, SiC, GaN, advanced ceramics and diamond-based thermal materials.

The future of semiconductor performance will therefore depend not only on better chips, but on better materials surrounding those chips.

The next phase of competition may be defined less by a single material breakthrough and more by the ability to integrate multiple specialized materials into one high-performance system.

In the AI era, semiconductor innovation is moving beyond simply making chips smaller.

It is increasingly about enabling chips to communicate faster, package more densely, consume power more efficiently and operate at lower temperatures.