SEC/N Thoughts

Any Electronics 101 course on semiconductors usually starts off with an explanation of what happens if you sandwich a dissimilar material (N) between two similar metals (P), forming a PNP junction, or switch. The properties of the material sandwiched in between greatly influence the ease at which current flows between the materials on either side.

The same analogy can be made for the used equipment market, where the chip manufacturers are both the providers (P) and purchasers (P) of the surplus equipment, and the OEMs, brokers, refurbishers and service providers are all middlemen (N) in between. In much the same manner, these middlemen have a significant impact on how easily surplus equipment flows throughout the used equipment marketplace.

Being both the providers and purchasers, this would appear to be a win/win situation for the chip manufacturers. By taking a coordinated and proactive role, they should be able to provide direction, while at the same time exerting a significant amount of influence over the used equipment marketplace — but they don't. Used equipment councils of SEMATECH and JEITA are the only chip manufacturing organizations that have tried to come together to address this issue, but they historically haven't been well supported by their parent companies.

The primary reasons for this lack of synergy are that most chip manufacturers:

• Do not understand the used equipment marketplace sufficiently to effectively participate.
• Do not assign the buying and selling of used equipment a high enough priority, or resource it properly.
• Propagate conflicting asset recovery objectives between their various organizations (i.e. manufacturing, finance, purchasing, facilities).
• Seem to have a preference to stumble along, "inventing their own wheel."

The obvious benefits, should these chip manufacturers decide to pull together, would be the ability to synergistically address standards, ethics and other industry issues, as well as give direction to the industry.

Ironically, it appears in this case that the meat is holding the sandwich together.