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Interview

Magazine Feature
This article was originally featured in the edition:
2022 Issue 5

DuPont reshapes IC materials manufacturing for post-COVID success

News

Leading electronic materials manufacturer DuPont is making strides towards improving overall operational functions, leveraging the lessons learned during and after the COVID-19 pandemic. While challenges remain, the company sees many opportunities as semiconductor manufacturing enters its next phase. Demand for ICs soared during and immediately after the pandemic, but the fragile recovery points to the need for continuing innovation to achieve success in 2023 and beyond.

Silicon Semiconductor Technical Editor Mark Andrews spoke with DuPont’s Sang Ho Kang, VP and General Manager, Semiconductor Technologies, DuPont Electronics & Industrial.

Leading electronic materials manufacturer DuPont is making strides towards improving overall operational functions, leveraging the lessons learned during and after the COVID-19 pandemic. While challenges remain, the company sees many opportunities as semiconductor manufacturing enters its next phase. Demand for ICs soared during and immediately after the pandemic, but the fragile recovery points to the need for continuing innovation to achieve success in 2023 and beyond Unprecedented demand for semiconductors of all types created massive opportunities and headaches for IC makers across global markets from 2020 through the early part of 2022. Even as device and equipment sales soared, so did backlogs and a scramble to meet customer demands while maintaining quality and profitability.

Major suppliers, vendors and manufacturers were at the center of the drive to produce more chips; they also played a central role as countries such as the United States and regional economic blocks including the European Union began efforts to ‘on-shore’ IC production that had shifted largely to Asian manufacturing centers over the past three decades. Silicon Semiconductor Technical Editor Mark Andrews spoke with DuPont’s Sang Ho Kang, VP and General Manager, Semiconductor Technologies, DuPont Electronics & Industrial in an effort to delve into issues major electronic materials suppliers are addressing and opportunities that companies like DuPont see in the New Year and the years that follow.

MA: One of many COVID-19 impacts on manufacturing could be traced back to supply chain issues. Has the ‘mess’ of 2020-2021 been untangled? What lies ahead for DuPont and other major suppliers?

SHK: I think we all recognize that there are no cure-alls or miraculous solutions that can resolve all the disruptions, especially in the short term. Like others, we’ve experienced many, including raw material supply constraints and delays driven by increased demand and pandemic-related production slowdowns, as well as the scarcity of logistics resources, ranging from appropriate transport to packaging materials. I think it is particularly challenging for our industry because there are so many complexities related to quality and consistency. For example, another industry might quickly be able to change packaging materials without impact to their product, but in semiconductor materials, even changing the size of packaging could warrant rigorous testing and qualification! Likewise, we deal with a lot of temperature-controlled transport, which limits the alternatives available.

Our DuPont team has been creative and customer-oriented in navigating these challenges, with two key areas of focus. The first is enhanced engagement with logistics providers. We’re now connecting much more frequently to monitor conditions and evaluate alternatives when appropriate. Through this collaboration, we can often secure priority and advance bookings, and identify additional ports and airports that can be used when needed.

The second is enhanced collaboration with key raw material suppliers to procure materials and supplies in time. We’ve been establishing and building relationships with strategic suppliers and providing them strong visibility into our future needs. In some cases, we are collaborating with suppliers and customers to secure alternative products or sourcing locations. The past couple of years have put business continuity plans to the test, as we put some of these strategies into practice and take the learnings into planning for future potential disruptions.

We’re also continuing to invest in our regional/local capabilities by having teams close to our customers. This can help to minimize potential issues through shorter logistics lead-time between a source location and destination, and quicker technical engagement or issue resolution. As we build closer networks with customers, suppliers and logistics providers, we are striving to do this in a persistent manner with a long-term view – these cannot be sustained if acting in a myopic view or in response to a single concern. As we look ahead, suppliers won’t be fully protected from any impacts of the next pandemic or substantial disruption event, but we will be in a better position through the increased collaboration and communication across the supply chain

MA: What is felt still needs to be done to handle immediate and short-term issues while planning for a more efficient future?

SHK: When COVID-19 was identified as a global pandemic and people realized the potential risks, panic buying occurred across the semiconductor industry, much like it did for consumers. Panic buying made the industry a bit chaotic because all resources have limits, be it volume/manufacturing capacity, logistics bandwidth or labor. This created inefficiency to use these limited resources, and consequently, many parts of the industry were negatively impacted.

Continuous improvement is a big part of DuPont culture, so accordingly, there are yet some opportunities to improve internal processes for increased visibility and enhance our escalation procedures. We also have significant untapped potential in digital technology, such as by better leveraging internal data and AI/machine learning to predict and react more swiftly to future events.

I’m extremely proud of what our DuPont team achieved and learned through these challenges. Our team coordinated well and will continue to focus on enhancing closer and transparent communication with all stakeholders across our supply chain to resolve imbalances of supply and demand.