News Article
Study boosts minority-owned suppliers in chip industry
Seeking to promote and drive continuous improvement of supplier diversity in the semiconductor industry, a SEMATECH-led industry group working with a consultant has published an industry study that outlines the business outlook and strategies for supplier diversity in one of the world's most volatile markets.
The study, published by SEMATECH'S Supplier Relations Action Committee (SRAC), reinforces an SRAC drive to continuously promote supplier diversity and opportunities for under-represented businesses, which are identified as firms that are majority¬owned by ethnic minorities, women, or other under-represented groups. The study was conducted by The Asaba Group of Natick, MA.
"As the semiconductor industry has become increasingly global, the need for global diversity in our supplier base has grown proportionately," said Steve McGovern, an SRAC member and SEMATECH procurement representative. "This need is also being driven by microchip companies and equipment suppliers' corporate social responsibility and our diverse end-consumers."
The SRAC survey, based on interviews with managers of major semiconductor manufacturing and equipment-making companies, lists specific strengths that a competitive supplier must possess to be successful in the $213 billion global semiconductor industry, which spends $39 billion annually in North America.
"According to survey respondents, we're finding that the semiconductor supply chain presents some excellent opportunities for diverse suppliers who are innovative and adaptable," McGovern noted.
To successfully enter the semiconductor industry supplier chain, a diverse supplier must:• Demonstrate innovation. Chip-makers and equipment manufacturers urgently need new tools and processes for better metrology, lower defects, dielectrics, advanced coatings, and pure chemicals.
"Wafer dies are getting smaller," noted one surveyed executive. "There's a bigger demand for more sensitive measurement tools. Lithography will be even smaller than the 45 nm [technology]. Diverse suppliers need to understand and be aware where the next generation of technology is leading to."• Support customers' global operations. With microchip consumption transitioning to offshore markets, chip and equipment companies have shifted to globally based manufacturing and marketing – necessitating suppliers who can meet rapid turnarounds and just-in-time requirements.
"The ability to ramp up and provide continuous R&D may be challenging for small and diverse businesses," one interviewee said.• Maintain financial resilience. Since the semiconductor industry historically has demonstrated boom-and-bust cycles, diverse suppliers should have resilient balance sheets and business models to ensure long-term survival.
"[Suppliers] need to be financially sound," said one survey respondent. "This decreases the risk of cash flow issues."• Exhibit high technical competence and perform to plan. Being thoroughly effective in their market niches is seen as indispensable to supplier success. According to one survey participant,
"Potential suppliers need to have the right processes in place and have the right skill sets... They must be able to handle supply volumes and display on-time delivery."
