Supply Chain Differences Lead to Semiconductor Divide
Nicole Lewis, Contributing Editor -- Semiconductor International, 9/1/2001
Deal with this! In a recent study on the semiconductor industry and its adoption of e-business technology, 42% of the respondents said they consider implementing e-business in their IT networks "somewhat" important to their organization. This is a highly disturbing statistic given that almost every conference call these days is as much a report on the financial status of a company as it is a statement of an entire industry's inability to predict the flow of inventory, forecast the future and give guidance to investors.
The study, conducted by Andersen LLP and Semiconductor Equipment and Materials International (SEMI), also showed that, for semiconductor manufacturers posting sales greater than $25M, e-business accounted for 5-30% of their IT budgets. For companies with revenues of less than $25M, their e-business spending was only 5-15% of their total IT budget.
This could be the beginning of the semiconductor divide, because any company that cannot boost its supply chain technology capabilities now will be less likely to compete with companies that can more efficiently connect electronically with their customers and suppliers.
The study also revealed that, because the majority of semiconductor facilities reside in the Asia-Pacific and European regions, the process of e-business applications has been slowed by an immature LAN line infrastructure that hinders bandwidth and Internet access speed. Respondents said they were hesitant to risk intellectual property exposure by linking their systems and sharing data with customers and suppliers within the supply chain. They also noted the lack of market data and information to plan and forecast, and that the technically daunting task of configuring supply chain technology to accommodate different tax laws that affect sales and purchase data is still an unresolved issue.
What this study exposes is the fundamental fact that the semiconductor industry has a far way to go as it plots its course toward a mature supply chain network.
