Industry 4.0 has transformed manufacturing, connecting machines, automating processes, and changing how factories think and operate. But its success has revealed a new constraint: compute. As automation, AI, and data-driven decision-making scale exponentially, the world’s factories are facing a compute challenge that extends far beyond performance. The next industrial era—Industry 5.0—will bring even more compute demand as it builds on the IoT to improve collaboration between humans and machines, industry, and the environment.
Progress in this next wave of industrial development is dependent on advances at the semiconductor level. Advances in chip design, materials science, and process innovation are essential. Alongside this, there needs to be a reimagining of how we power industrial intelligence, not just in terms of the processing capability but in how that capability is designed, sourced, and sustained.
Rethinking compute for a connected future
The exponential rise of data and compute has placed intense pressure on the chips that drive industrial automation. AI-enabled systems, predictive maintenance, and real-time digital twins all require compute to move closer to where data is created: at the edge. However, edge environments come with tight energy, size, and cooling constraints, creating a growing imbalance between compute demand and power availability.
AI and digital triplets, which build on traditional digital twin models by leveraging agentic AI to continuously learn and analyze data in the field, have moved the requirement for processing to be closer to where the data is created. In use cases such as edge computing, where computing takes place within sensing and measuring devices directly, this can be intensive. That decentralization introduces new power and efficiency pressures on infrastructure that wasn’t designed for such intensity.
The result is a growing imbalance between performance and the limitations of semiconductor manufacturing. Businesses must have broader thinking around energy consumption, heat management, power balance, and raw materials sourcing. Sustainability can no longer be treated as an unwarranted cost or compliance exercise; it’s becoming a new indicator of competitiveness, where energy-efficient, low-emission compute enables manufacturers to meet growing data reliance without exceeding environmental limits.
Businesses must take these challenges seriously, as the demand for compute will only escalate with Industry 5.0. AI will become more embedded, and the data it relies on will grow in scale and sophistication.
If manufacturing designers dismiss these issues, they run the risk of bottlenecking their productivity with poor efficiency and sustainability. This means that when chip designers optimize for Industry 5.0 applications, they should consider responsibility, efficiency, and longevity alongside performance and cost. The challenge is no longer just “can we build faster systems?” It’s now “can we build systems that endure environmentally, economically, and geopolitically?”
Innovation starts at the material level
The semiconductor revolution of Industry 5.0 won’t be defined solely by faster chips but by the science and sustainability embedded in how those chips are made. For decades, semiconductor progress has been measured in nanometers; the next leap forward will be measured in materials. Advances in compounds such as silicon carbide and gallium nitride are improving chip performance and transforming how the industry approaches sustainability, supply chain resilience, and sovereignty.
These materials allow for higher power efficiency and longer lifespans, reducing energy consumption across industrial systems. Combined with cleaner fabrication techniques such as ambient temperature processing and hydrogen-based chemistries, they mark a significant step toward sustainable compute. The result is a new paradigm where sustainability no longer comes at an artificial premium but is an inherent feature of technological progress.
Process innovations, such as ambient temperature fabrication and green hydrogen, offer new ways to reduce environmental footprint while improving yield and reliability. Beyond the technology itself and material innovations, more focus should be placed on decentralization and alternative sources of raw materials. This will empower businesses and the countries they operate in to navigate geopolitical and supply chain challenges.
Collaboration is the new competitive edge
The compute challenge that Industry 5.0 presents isn’t an isolated problem to solve. The demand and responsibility for change doesn’t lie with a single company, government or research body. It requires an ecosystem mindset, where collaboration is encouraged, replacing competition in key areas of innovation and infrastructure.
Collaboration between semiconductor manufacturers, industrial original equipment manufacturers, policymakers, and researchers is important to accelerate energy-efficient design and responsible sourcing. Interconnected and shared platforms within the semiconductor ecosystem de-risk tech investments. This ensures the collective benefits of sustainability and resilience benefit entire industrial innovation, not just individual players.
The next era of industrial progress will see the most competitive organizations collaborate and work together, with the goal of shared innovation and progress.
Powering compute in the Industry 5.0 transition
The evolution from Industry 4.0 to Industry 5.0 is more than a technological upgrade; it represents a change in attitude around how digital transformation is approached in industrial settings. This new era will see new approaches to technological sustainability, sovereignty, and collaboration that prioritize productivity and speed. Compute will be the central driver of this transition. Materials, processes, and partnerships will determine whether the industrial sector can grow without outpacing its own energy and sustainability limits.
Industry 5.0 presents a vision of industrialization that gives back more than it takes, amplifying both productivity and possibility. The transition is already underway. Now, businesses need to ensure innovation, efficiency, and resilience evolve together to power a truly sustainable era of compute.
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