The Need to Capitalize on Semiconductor Supply Chain Operations Amidst COVID-19
COVID-19 disrupted the semiconductor supply chain, exposing constraints in various corners of the economy. However, the automotive semiconductor has been the most significant, with thousands of vehicles sitting incomplete due to lack of semiconductor. With the problems of shipping capacity, it is challenging to expand new chip-making capacity with a shrinking capacity in semiconductor manufacturing which could last for years.
More than ten industry associations representing lots of semiconductor supply chain companies gave a statement urging nations to make semiconductor operations a priority as they design public health strategies to tackle the covid 19 pandemic. These associations make up the Global semiconductor Industry; thus, they encourage countries to make operations in the supply chain of semiconductors a crucial issue.
The announcement comes in line with the industry’s significant preferences in responding to the global pandemic, which contributes to fight the virus, protecting the health and safety of its workers, and ensuring the sustainability of the essential technologies and systems that support modern society.
The signatories to this statement, including the Semiconductor Industry Associations (SIA) in the U.S., EU, Korea, China, and Singapore, with other industry groups representing the electronics and semiconductors industry in the Philippines and Malaysia.
These groups call on governments to state supply chain operations as essential business or infrastructure to guarantee continuity even in the face of lockdowns or other restrictions on the free movement of people. The statement emphasizes the nature of semiconductors as a significant component of the technologies controlling and enabling infrastructure and life-essential equipment like medical devices, health care, water systems, communication networks and transportation, and financial institutes.
In the statement, it is also noted that the global and integrated nature of the supply chain for semiconductors, the shortages created as a result of operating restrictions in a particular region cannot be forced by production in other areas. These shortages result in rigorous situations at electronic factories, which affects the digital economy. There are hopes of partnering with governments worldwide to fight COVID-19 and ensure the semiconductor industry stays valuable on operations and infrastructure even amidst the global health crises.
As government agencies create measures in battling the raging pandemic like compulsory business closures, the semiconductor industry asks governments to emphasize and focus on essential infrastructure or businesses so that there are operations continuity for the various areas of the economy and digital infrastructure.
The signatories to this statement include the SIA in Japan, U.S, Chinese Taipei, and Singapore, including other industry groups. Semiconductors are essential components of the technologies for water systems, transportation, and other sectors.
You gain access to various domains with semiconductors, including education, medicine, government, finance, and others. Supply chain and Semiconductors are essential to support different services that will become digital in months to ensure the global economy is productive and encourages recovery. The SIAs urge the government at various levels to make semiconductor operations a priority for their suppliers and companies. The industry is dedicated to taking vital steps in ensuring essential workers stay safe and healthy and also to use the technologies to tackle the pandemic.
Companies are taking vital steps in response to the pandemic to ensure that supply chain partners have continuity plans on the ground, so they don’t suffer losses. Semiconductor executives hope to implement specific changes because of the covid 19 pandemic, including reviewing business continuity plans, implementing technology upgrades like cloud, collaborations, and other automation technologies.
Semiconductor manufacturers believe that covid 19 will positively impact various aspects like AI, investment, and different business strategies. With the supply chain disruptions and the forced shutdown of production lines in some countries and provinces, there’s a need for alternatives. With the increased demands and manufacturers’ dependence on short-term semiconductors, the volume produced cannot make up for the order.
Thus companies must weigh the benefits of other approaches. Geographical diversity comes to play with flexible and adaptable supply chains becoming more successful. Therefore, manufacturers need to reassess the importance of introducing small supply chains for critical components rather than using a one-size-fits-all supply chain model.
The disruption of global supply chains, shortages of basic materials and other factors, and logistics delays are pandemic impacts on the semiconductor industry. The proposed way out is investing in digital supply chains, improving supply networkability, supply chain diversification, and factory automation to reduce the impact of labor shortages on supply. Companies should recognize the uniqueness of each step in the manufacturing process and how global supply bases are affected. In addition, companies should beyond the immediate supply chain and understand the disruptions to indirect suppliers as the pandemic heightens. Semiconductor companies operate a complex ecosystem, functioning across the value chain using various raw material, test, package, and equipment suppliers globally.