SEMATECH-Led Study Seeks to Boost Minority-Owned Suppliers in Chip Industry

Seeking to promote and drive continuous improvement of supplier diversity in the semiconductor industry, a SEMATECH-led industry group working with a consultant has published an industry study that outlines the business outlook and strategies for supplier diversity in one of the world's most volatile markets.

The study, published by SEMATECH'S Supplier Relations Action Committee (SRAC), reinforces an SRAC drive to continuously promote supplier diversity and opportunities for under-represented businesses, which are identified as firms that are majority-owned by ethnic minorities, women, or other under-represented groups. The study was conducted by The Asaba Group of Natick, MA.

"As the semiconductor industry has become increasingly global, the need for global diversity in our supplier base has grown proportionately," said Steve McGovern, an SRAC member and SEMATECH procurement representative. "This need is also being driven by microchip companies and equipment suppliers' corporate social responsibility and our diverse end-consumers."

The SRAC survey, based on interviews with managers of major semiconductor manufacturing and equipment-making companies, lists specific strengths that a competitive supplier must possess to be successful in the $213 billion global semiconductor industry, which spends $39 billion annually in North America.

"According to survey respondents, we're finding that the semiconductor supply chain presents some excellent opportunities for diverse suppliers who are innovative and adaptable," McGovern noted.

To successfully enter the semiconductor industry supplier chain, a diverse supplier must:

--  Demonstrate innovation. Chip-makers and equipment manufacturers
    urgently need new tools and processes for better metrology, lower defects,
    dielectrics, advanced coatings, and pure chemicals. "Wafer dies are getting
    smaller," noted one surveyed executive. "There's a bigger demand for more
    sensitive measurement tools. Lithography will be even smaller than the 45
    nm [technology]. Diverse suppliers need to understand and be aware where
    the next generation of technology is leading to."
--  Support customers' global operations. With microchip consumption
    transitioning to offshore markets, chip and equipment companies have
    shifted to globally based manufacturing and marketing -- necessitating
    suppliers who can meet rapid turnarounds and just-in-time requirements.
    "The ability to ramp up and provide continuous R&D may be challenging for
    small and diverse businesses," one interviewee said.
--  Maintain financial resilience. Since the semiconductor industry
    historically has demonstrated boom-and-bust cycles, diverse suppliers
    should have resilient balance sheets and business models to ensure
    long-term survival. "[Suppliers] need to be financially sound," said one
    survey respondent. "This decreases the risk of cash flow issues."
--  Exhibit high technical competence and perform to plan. Being
    thoroughly effective in their market niches is seen as indispensable to
    supplier success. According to one survey participant, "Potential suppliers
    need to have the right processes in place and have the right skill sets...
    They must be able to handle supply volumes and display on-time delivery."
    

A presentation developed by SRAC's Supplier Diversity Committee, containing more details on the study, is available at the following link: http://www.sematech.org/docs/SRAC_study0406.pdf.

About SRAC:

SRAC is an advisory council consisting of representatives from SEMATECH member companies. The mission of SRAC is to provide a forum for member companies to understand the materials supply chain impact of current and emerging technologies in the semiconductor industry in order to help assure a robust supply base. Members also share best practices in areas of mutual interest.

About SEMATECH:

SEMATECH is the world's catalyst for accelerating the commercialization of technology innovations into manufacturing solutions. By setting global direction, creating opportunities for flexible collaboration, and conducting strategic R&D, SEMATECH delivers significant leverage to our semiconductor and emerging technology partners. In short, we are accelerating the next technology revolution. For more information, please visit our website at www.sematech.org. SEMATECH, the SEMATECH logo, AMRC, Advanced Materials Research Center, ATDF, the ATDF logo, Advanced Technology Development Facility, ISMI and International SEMATECH Manufacturing Initiative are servicemarks of SEMATECH, Inc.

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