Global chip shortage problem may be 'long term'
Industries of all types are feeling the hit to manufacturing production because of a shortage of semiconductors needed for their products. Syed Alam, Global Semiconductor Lead gives his insight into the factors that contributed to the shortage and possible solutions to help businesses build resiliency into their future supply chains.
Hit by a perfect storm
Automotive, smartphone and consumer tech manufacturers have felt the strain of reduced chip availability. In fact, many manufacturers have been forced to delay product launches resulting in expected revenue loss.
Strengthening supply chain today
These steps can help mitigate risk and minimize disruption to business and operations that can set the stage for short and long term impact requiring greater investments in time and resources.
Reimagining supply chain resilience for the future
Looking at long-term preparations, companies can build supply chain resilience into their planning and manufacturing processes by evaluating these key considerations.
- Know all your supply competitors. Foundries are serving businesses across different industries and the threat of supply competitors gaining capacity may be greater than direct competition.
- Rethinking supply networks and co-location. Companies should give serious consideration to not only multi-sourcing strategies, but also to a hybrid of in-sourcing and out-sourcing.
- Time's up for just-in-time. Built on the just-in-time principle, semiconductor supply chains are experiencing that working in this manor can have a devastating impact.
This inverted pyramid shows the descending amount of semiconductors companies to fabrication houses, depicting the competition that is created when semiconductor companies rely on same fabs that their competitors are using.
The current shortage offers essential lessons for any company that relies on chips for their products. It is vital to understand that the whole value chain goes deep and companies need insight into the whole process from fabrication, assembly and packaging all the way to the substrate factory.