PROCUREMENT STRATEGY
From a cost perspective, there’ s a carrying cost to inventory, but timing is also important. If you stock up when prices are high, you’ ll have a cost disadvantage. Buying components during market lulls can be advantageous as you anticipate market dynamics changes. These changes could stem from geopolitical escalations or unexpected demand bubbles. Understanding all factors that could affect a component’ s supply chain becomes critical when determining inventory levels.
Q. HOW CAN COMPANIES IMPLEMENT SUPPLIER DIVERSITY WITHOUT COMPROMISING QUALITY OR INCREASING COMPLEXITY?
» There are two ways to approach this with semiconductors. For commodity items where alternatives exist, it’ s important to approve as many suppliers as possible during design. While there are costs to adding suppliers to an approved vendor list, ensuring multiple sources for commodity parts is crucial. During recent shortages, even standard analog components were affected, and companies with singlesourced parts faced 10x price premiums. So, where possible, multi-source standard components.
For high-IP parts like microcontrollers or ASICs that are harder to multi-source, understand your manufacturer’ s supply chain. Do they have multiple production nodes that could support operations if disruptions occur? Multi-sourcing for resilience doesn’ t always mean having multiple suppliers – it might mean your
US $ 600bn +
estimated value of the semiconductor industry
supplier has multiple supply chains. Many semiconductor manufacturers now highlight this as a selling point, showing they have two or three supply chains for particular parts to minimise disruption from events or new tariff mandates.
Q. HOW ARE TECHNOLOGIES BEING LEVERAGED TO ENHANCE SUPPLY CHAIN RESILIENCE FOR SEMICONDUCTORS GLOBALLY?
» AI can significantly improve forecast accuracy. Human behavior becomes a factor in shortage situations- people might ask for 200 units when they only need 100, hoping to get closer to their requirements. AI helps manufacturers spot
142 May 2025