The Resilience of the Semiconductor Supply Chain
This white paper examines the logistics challenges and impacts of the semiconductor industry's efforts to create more resilient and adaptable supply chains and manufacturing networks.
The semiconductor industry is changing. This white paper examines the logistics challenges and implications of the industry's efforts to build more resilient, flexible supply chains and manufacturing networks in response to disruptions, shortages, and strong demand, focusing on new fabrication plants, capacity expansion, and smarter supply chain strategies.
Challenges and Opportunities from Semicon Supply Chain Resilience
| The Challenge | 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 Producer Response | 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. | |
| The Customer Response | 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 Role of Logistics | 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. | |
| The Future Supply Chain | 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. |
After three years of disruptions, shortages, and strong demand, semiconductor manufacturers and their customers are working diligently to enhance the resilience of their manufacturing networks and supply chains. The challenges faced during the pandemic have highlighted critical vulnerabilities, prompting the industry to rethink its strategies. By applying valuable lessons learned from these turbulent times, chip makers are now focused on creating systems that can better withstand future shocks, ensuring supply chain stability and enabling sustained, long-term growth for the industry.
Semiconductor companies are making unprecedented investments in new manufacturing facilities to boost overall production capacity and reduce the geographic concentration of critical production capabilities. This shift is designed to strengthen the resilience and flexibility of supply chains. Meanwhile, their customers are reevaluating strategies related to product development, inventory management, and supplier collaboration. These efforts are aimed at mitigating future disruptions, enhancing efficiency, and ensuring a more reliable, diversified supply chain to meet growing global demand.
Construction Logistics at Intel
Interview with Shay Bar-El from Intel on construction logistics for semiconductor fabrications.
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