Warren Buffett, a man who has the business knack for seizing the moment, has said, “You do things when the opportunities come along.” A recent report on the semiconductor industry by Julie Fraser, independent advisor and president of Iyno Advisors, indicates that such a time may be at hand for this critical market sector.
As Fraser notes, today’s economy of connected things and people is “firmly based on semiconductors as more electronics are built into nearly every manufactured product, whether complex high-value processors or high-volume simple chips.” The result is an industry with tremendous opportunity, as evidenced by last year’s $302 billion in sales.
Coupled with this opportunity is change and risk. Not only has the explosion of applications changed the semiconductor landscape (particularly with electronics replacing or controlling mechanical systems, and taking an increasingly critical role in functional safety), customer expectations have changed. For today’s users of semiconductors, from Houston to Hamburg to Hangzhou, failure is not an option.
In our increasingly complex and demanding global marketplace, semiconductor manufacturers must innovate to meet the demand for flawless quality with more efficiency and lower cost. Increased visibility and greater collaboration across supply chain networks are essential to manufacturers’ ability to quickly adapt processes to respond to rapid and often volatile change. Since resilient technologies are key to developing these abilities, manufacturing execution systems (MES) should be considered a fundamental part of technology strategies for semiconductor manufacturers.
According to Mark Remson, NXP Semiconductors’ vice president of manufacturing IT, “There’s a major transition that has to happen in the next two to five years. There’s been much consolidation in the MES industry; the vendors are now driving to a different set of roadmaps that we need to contend with and plan around.” This sentiment is supported by the fact that a number of MES providers have announced the planned end of support for many product versions that are used in semiconductor fab and back-end facilities.
All this transition (marketplace, internal process requirements, customer expectations, vendor roadmaps) is combining to make reassessment of current MES a top priority for most semiconductor companies. The issues they face are consistent: cost and capabilities of legacy versus new systems, longevity of the facilities under consideration, and specific business performance needs. Our next two posts will explore these issues in detail: first, the limits of legacy systems, and then the benefits of modern plant systems and MES.
Semiconductor Industry Report - The Right Time to Change