A review on how Covid-19 impacted American semiconductor manufacturers
Covid-19 has caused much damage to different organizations and manufacturing companies. Covid came like a rushing wind and sept the foot of the globe. Its effect is still causing lots of damage to the market and economy in most countries. Until recently, Covid-19 was still resurfacing, making it more complicated for industries to carry on. The pandemic is changing the manner of running organizations or companies since the emergence of the pandemic. It has led to a shortage of human resources, demand and supply disruption, and inflation in the cost of production.
The shortage is due to the enforcement of social distancing and the death toll of the citizens. Covid-19 has opened our eyes to other ways of doing things without falling below standard. The fall in companies’ desire for manpower has caused more employees to suffer a decline in their mental health.
What are semiconductors?
Semiconductors are the components with conductivity between non-conductors and conductors. The elements could be pure elements or gallium arsenide, silicon, or germanium.
A lot of electronic devices and other technologies make use of the chips produced on their products. For example, chips are for making automobiles, smartphones, and electronics, among others.
Semiconductor companies take about three years to create another standing company for production, which has made the pandemic hit the supply chain of chips. There are more individuals and companies requesting devices that have chips to connect with the globe from home. The new normal is making employees work from home and schools to use the computer to communicate with their students. All of those have led to the increase in the demand for technological devices and chips production.
Impact of Covid-19 on the semiconductor manufacturer
The significant move of Covid-19 on the semiconductor industry has called for leaders in the sector; to set targets for long and short-term effects on the industry.
The short-term effect is ongoing as the well-being of the workers and contractors has been considered for flexibility. In addition, the need for social distancing and safety has made workers be in groups, some working from home while others remain permanently for physical activities. Also, paying the workers with the reduction in production and supply chain has been a big challenge.
What is The long-term impact of covid-19 on semiconductor manufacturers?
The future challenges that might surface due to the post-pandemic era are the viewing point of the long-term impact. The semiconductor managers await the new normal phase as they try to protect the interest of their employees, customers, and supply chains alongside other concerns. It has led their thinking into the creation of a new model in the semiconductor industry. No aspect of the new business model would be untouched in the new normal. Such changes include;
– The elements of production.
– Demand forecasts.
– Production decision.
– R&D strategy.
– Supply-chain footprints.
– Option for mergers and acquisitions(M&A).
Semiconductor leaders will have to consider the effect of the pandemic to make decisions on a new starting point to attain success. The two main focuses of the long-term impact of covid-19 are;
Market pull
The eyes of companies have focused their experiment on new ways of studying, working, and communicating through technology. The trend is such that it will have a long-term impact on services for existing products. For instance, semiconductors that aids connectivity, online collaboration, and sensors could have a higher demand. The semiconductor could also serve the following purpose for their products and services.
– Ambient assisted-living appliances like sensors assist very ill patients to stay home and avoid moving about and the elderly.
– For digital work processes and the internet, specifically in languishing sectors like defense, healthcare, and government.
– To give non-physical solutions like elevator buttons and touch servers for the people.
– To deliver automated-delivery remedies like drones and robots.
In the same way, covid has opened new demands; it could also lessen the need for semiconductors in another relevant sector.
The supervising industry shifts and geopolitical feedback for long-term impact
From the angle of supply, the pandemic has revealed risks that were not noticeable at the initial stage of the pandemic. It has led to a possible depletion of sensitive parts and elements. Most semiconductor manufacturers are already resetting their supply strings to boost resilience which may slide I to the new normal. Their plan will show the possible effects of expanding inventory and stock levels and production.
The scarcity of semiconductors has caused panic to many industries, especially the automakers, as they move out of business. In addition, many plants have been closed in North America because of a shortage of chips.
Amid the pandemic when people could not move about, the demand for electrical devices rose, but industries could not operate due to social distancing. The shutdown has caused a significant fall in the production sector, and now supply is scarce to the demands. It has also allowed the industry to lose lots of money.
What is the impact of covid-19 on the workforce in the semiconductor industry?
Most companies have found the management of their employees very tasking. The challenges are because there has been a need to use a workforce set over a long period. And others on part-time and contractors. The procedure of controlling this extended workforce is complicated.
Some of the processes of maintaining the workforce include;
– The review of Human Resource policies on working and traveling flexibility.
– Putting the schedule of contractors who might be working for other companies into consideration while making policies.
– Understanding where the workload is likely to increase or decrease in the future.
– The training of employees working from home, and the monitoring of their performance.
Conclusion
The process of reviewing the impact of covid-19 will still be ongoing for a long time, owing to its blasts on the globe. Many companies have fewer physical contacts, and so there is a need for more technological devices to make work easy. It is not only the semiconductor manufacturers that have suffered the impact of the pandemic in America. The effect has cut across diverse sectors, and it will take a while if things ever get to be normal again.
References
– https://advisory.kpmg.us/articles/2020/impact-of-covid-19-on-semiconductor-industry.html