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The Resilience of the Semiconductor Supply Chain

The semiconductor industry is changing. After three years of disruption, shortages and strong demand, chip makers and their customers are striving to increase the resilience of their manufacturing networks and supply chains. They are applying lessons learned during the pandemic to build systems that can mitigate shocks and support sustained long-term growth.

Semiconductor players are making unprecedented investments in new manufacturing facilities, aiming to increase overall capacity and reduce the geographic concentration of critical production capabilities. Their customers, meanwhile, are rethinking their product, inventory, and supplier collaboration strategies.

This discussion paper examines the logistics implications of these shifts, from the challenge of building and supporting multiple new fabrication plants to the need for smarter, more flexible supply chains for semiconductor components.

DHL Discussion Paper

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Sources: semiconductors.org mckinsey.com asml.com semi.org

 

Challenges and Opportunities from Semicon Supply Chain Resilience

Despite operating at close to maximum capacity, the global semiconductor industry unable to satisfy increased demand for chips. Supply shortages have led to $500 billion in lost sales of semiconductor-dependent products over the past two years.

The industry is now investing 99 billion USD in fab equipment in 2022, almost double the pre-pandemic rate. Government incentives are encouraging semiconductor players to locate new plants right across the world, and the building boom is already stretching the capacity of contractors and suppliers to the sector. Source: Semi.org

To ensure availability of critical materials, the industry’s customers are selectively increasing their inventories, investing in new visibility and forecasting tools, and entering new advance-purchasing agreements.

The logistics industry can provide support across the whole semiconductor value chain, for example by providing advanced project logistics capabilities and adaptable warehousing solutions to support fab construction, or by helping semiconductor users to improve visibility and predictability and smart, flexible inventory and fulfillment strategies.

Resilience in the semiconductor sector will require closer collaboration within and between companies. With the help of advanced digital tools, they can achieve greater transparency and make faster, more effective decisions. That will help them overcome today’s issues, and equip them to build supply chains that are robust, responsive, and sustainable.

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Construction Logistics at Intel

Interview with Shay Bar-El from Intel on construction logistics for semiconductor fabrications.

Also, watch the webinar on Construction Logistics for Semiconductor Fabrications