January 8, 2021
Although the most severe period of the COVID-19 pandemic has slowed the development of the semiconductor industry, the industry is currently recovering and is expected to usher in a period of significant growth in the coming year. Some institutions expect the growth rate of semiconductors to reach 12-14% in 2021, but the trade environment is still challenging and uncertain. In order to seize the business opportunities in the next 12 months, the company will have to deal with many challenges.
Market uncertainty makes digital experience the focus
In the past year, changes in the way people work have emerged, which will continue to affect the demand for semiconductor technology. Foresighted semiconductor companies will try to determine which products will generate the highest demand and prioritize their R&D investment accordingly.
This means better understanding of customers and operating environments, which is not easy for an engineering-led industry.
Accenture pointed out the importance of this in its "Semiconductor Tech Vision report", stating: "Over time, companies can now change the functionality of smart products or reconfigure their ecosystem." But they must ensure that the customer experience remains consistent and support all these changes. "
R&D innovation revolves around content sharing and collaboration
Companies that continue to focus on R&D and innovation may become stronger, and the semiconductor industry is aware of this. According to Accenture's report, 74% of semiconductor executives said that the risk of innovation is unprecedentedly high.
There is an increasing need to ensure that the latest and accurate documents are available to the right people at the right time. Enterprise information management platforms, such as OpenText™ Documentum™, will help organizations use the full value of their content, including the ability to analyze content to drive insight and action.
Cloud lays the foundation for growth
The transition of semiconductor companies to the cloud initially began to supplement processing on premises, adding additional processing power when necessary. Today, this has evolved to use the cloud as the main location for this data (including processing and storage). In addition, organizations are using the cloud to capture data about the use of products in the real world for feedback into product development.
The COVID-19 pandemic proves that the cloud can provide agility and elasticity requirements for any industry. The semiconductor industry, which relies on a digital ecosystem of suppliers, partners, and customers, is increasingly discovering that the cloud is the only viable solution that provides the powerful DevOps, microservices, security, and network design needed to effectively operate complex ecosystems.
Initially seen as a threat to IP, far-sighted companies provide cloud-based licensing solutions to enable customers to conduct design trials and pay for IP only after the chip is produced. By 2021, the transition to the cloud will accelerate.
Digital workforce productivity requires smart automation
There is no doubt that throughout the manufacturing process-semiconductors and other aspects-remote work will remain. Remote production, diagnosis and maintenance have now become permanent functions. In order to support these new work practices, semiconductor manufacturers will accelerate an already formed trend: the shift to intelligent automation.
Now, the manufacturing process requires the highest level of automation. Organizations will seek a range of tools, including digital process automation, RPA (Robot Process Automation), artificial intelligence and machine learning to eliminate manual processes and create an environment where employees and machines collaborate to improve operational efficiency and safety.
New business models require IP security
Semiconductor companies have a long history of working with and relying on external partners to help design and manufacture their products. Considering an environment where cash flow is primarily concerned but demand may grow rapidly, this trend may accelerate. For example, UBS (UBS) expects Intel to announce a long-term mass production commitment to outsource some chip manufacturing in 2021.
Both contract manufacturing and telecommuting have greatly increased the demand for security technology, which requires effective information sharing and collaboration. In each case, content and documents containing sensitive intellectual property must be exchanged outside the corporate firewall. The information management platform allows the management, access and distribution of content throughout the organization and beyond. In addition, there is an urgent need for a powerful enterprise remote access solution that can quickly and securely exchange graphics-rich documents (such as engineering files and CAD drawings) anywhere and any time.
Supply chain resilience can drive the growth of digital ecosystems
The COVID-19 pandemic has exposed many gaps in the manufacturing supply chain. In some cases, global outages have led to shortages of critical components. Like other manufacturers, supply chain flexibility has now become a routine task. Although the semiconductor organization will always cooperate with the global supply chain, the increase in localized production and the decrease in excessive dependence on a single supplier will be a growing trend.
By 2021, the company will seek to add more diversity in its supply chain and establish a digital ecosystem that connects suppliers, partners, and customers to increase resilience and better respond to fluctuations in demand. As organizations seek to identify quickly, join new suppliers and start trading with new suppliers to ensure flexibility and provide services for new product development, multi-enterprise supply chain business networks (SCCN) will become more and more popular. The timely and effective exchange of core business documents has laid the foundation for semiconductor companies to create digital workflows.
M&A activity increases, integration is imperative
After a short vacation, M&A activities will begin in the second half of 2020. As we enter 2021, the integration of the semiconductor industry is likely to become a major trend. As growth in some areas slows and growth in others accelerates, companies are increasingly turning to mergers and acquisitions to maintain profitability, seek new sources of income and diversify their product portfolio.
The focus is on information integration, because the two companies need to be able to operate together very quickly. McKinsey suggests that 50-60% of plans aimed at obtaining synergy from mergers and acquisitions activities are closely related to information systems. Traditionally, it is estimated that integration must be well developed within the first 100 days, but for semiconductor companies, facing incredibly rapid product design and shortened product life cycles, progress must be made as soon as possible. The company will turn to an enterprise integration platform to implement any integration functions needed to facilitate mergers and acquisitions.