7 information challenges impacting the semiconductor boom in 2021

While the worst of the COVID-19 pandemic slowed the semiconductor sector, it is now recovering and can look forward to a period of significant growth in the year ahead. Some estimates place the…

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January 15, 20217 minutes read

While the worst of the COVID-19 pandemic slowed the semiconductor sector, it is now recovering and can look forward to a period of significant growth in the year ahead. Some estimates place the growth at 12-14% for 2021, however trading conditions are still challenging and uncertain. To seize the business opportunities available over the next twelve months, there are many information challenges that firms will have to address. 

Market uncertainty places spotlight on digital experience 

The changes in how people work that have come to the fore over the last year will continue to impact demand for semiconductor technology. Forward thinking semiconductor companies will try to determine what products will generate the highest demand and prioritize their R&D investments accordingly.  

This means better understanding the customer and the operating environment – no small task for what has been an engineering-led sector. Digital Experience (DX) supplies the tools to better connect, communicate and engage with customers and supports your employees in delivering that customer experience.  

In its Semiconductor Tech Vision report, Accenture notes the importance, saying: “Companies can now change the functionality of smart products or reconfigure their ecosystem over time. But they have to make sure that the customer experience remains consistent and supported throughout all these changes.”  

R&D innovation revolves around content sharing and collaboration 

Companies that continue their focus on R&D and innovation are likely to emerge stronger, something the semiconductor industry is aware of. Accenture’s report noted that 74% of semiconductor executives say the stakes for getting innovation right have never been higher.  

The need to ensure that up-to-date, accurate documentation is available to the right people at the right time has never been greater. Enterprise Information Management platforms, such as OpenText™ Documentum™, will help organizations harness the full value of their content, including the power to analyze content to drive insight and action. 

Cloud provides the foundation for growth 

The transition to cloud for semiconductor companies initially started to supplement processing done on premises, adding extra processing power wherever necessary. Today, that has developed into using the cloud as the primary location for that data, both for processing and storage. In addition, organizations are using the cloud to capture data on the real-world use of products to feed back into product development. 

The COVID-19 pandemic demonstrated the need for the agility and resilience that cloud can provide for any industry. The semiconductor industry, with its reliance on digital ecosystems of suppliers, partners, and customers, is increasingly finding that cloud is the only viable solution to deliver the robust DevOps, microservices, security, and network designs needed to effectively operate complex ecosystems. 

Initially perceived as a threat to IP, forward thinking companies are offering cloud-based licensing schemes to enable customers to experiment with design and only pay for IP after the chip is in production. The transition to the cloud will accelerate during 2021. 

Digital workforce productivity requires intelligent automation 

There is no doubt that throughout manufacturing – semiconductor and otherwise – remote working is here to stay. Remote production, diagnostics and maintenance are all now permanent features. To support these new work practices, semiconductor manufacturers will accelerate a trend already in place: the move to intelligent automation.  

The highest levels of automation are now a requirement for manufacturing workflows. Organizations will look to a range of tools, including digital process automation, RPA (Robotic Process Automation), AI, and machine learning to remove manual processes and create environments where employees and machines collaborate to increase operational efficiency and safety.  

New business models require watertight IP security 

Semiconductor companies have a long history of working with and relying on external partners to help design and manufacture their products. Given an environment where cash flow is a primary concern, but demand may quickly grow, this trend is likely to accelerate. For example, UBS expects Intel to announce a long-term volume commitment for outsourcing some chip manufacturing in 2021. 

Both contract manufacture and teleworking dramatically increase the need for secure technology that allows effective information sharing and collaboration. In each case, content and documents containing sensitive Intellectual Property must be exchanged outside of the corporate firewall. Information management platforms allow content to be managed, accessed, and distributed across the organization and beyond. In addition, there is a pressing need for a powerful enterprise remote access solution capable of quickly and securely exchanging graphics-rich documents – such as engineering files and CAD drawings – anywhere and at any time. 

Supply chain resilience drives growth of digital ecosystems 

The COVID-19 pandemic exposed the cracks in many manufacturing supply chains. Global disruption led, in some instances, to shortages of critical parts and components. In common with other manufacturers, supply chain resilience is now the order of the day. While semiconductor organizations will always operate with global supply chains, an increase in localized production and the reduction in over-reliance on single suppliers will be a growing trend.  

In 2021, companies will look to add more diversity to their supply chains, developing digital ecosystems that connect suppliers, partners, and customers to build resilience and better handle demand fluctuations. Multi-enterprise Supply Chain Commerce Networks (SCCN) will become increasingly popular as organizations seek to quickly identify, onboard, and start trading with new suppliers to ensure resilience and serve entirely new product developments. The timely and effective exchange of core business documents underpins the creation of digital workflows for semiconductor firms. 

Increased M&A activities create an integration imperative 

After a short hiatus, merger, and acquisition (M&A) activity took off in the second half of 2020. As we enter 2021, Consolidation in the semiconductor industry is likely to be a major trend. As growth slows in some segments and accelerates in others, companies are increasingly turning towards M&A to sustain profitability, seek new revenue streams and diversify their product portfolios. 

The focus is on information integration as the two companies need to be able to operate together very quickly. McKinsey suggests that 50-60% of the initiatives intended to capture synergies from M&A activity are strongly related to information systems. Traditionally, it has been estimated that integration must be well advanced within the first 100 days but for semiconductor companies, faced with incredibly fast product design and shrinking product lifecycles, progress must be achieved as quickly as possible. Companies will turn to enterprise integration platforms to achieve the any-to-any integration capabilities needed to facilitate their M&A efforts. 

To find out more about OpenText’s range of digital solutions for manufacturing, visit our website. 

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OpenText, The Information Company, enables organizations to gain insight through market-leading information management solutions, powered by OpenText Cloud Editions.

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