Semiconductor design and manufacturing: Achieving leading edge capabilities.As chips get smaller and competition increases, semiconductor companies need a new strategy that considers everything from fab size to supply-chain issues.
Semiconductors are the unsung heroes of the technology world, working behind the scenes to power everything from toys and smart phones to cars and thermostats. In recent years, they have enabled breakthrough technologies, including artificial intelligence and machine learning that have transformed how we live and work. Taking the digital revolution to the next level will require even more advanced chips with greater computational power and memory capacity.
With the COVID-19 crisis disrupting supply chains and geopolitical tensions increasing, semiconductor companies have become more interested in achieving end-to-end design and manufacturing capabilities for leading-edge technology. Many governments share this interest and are attempting to support their local semiconductor markets. But new fabs and extensive R&D programs—essential for producing leading-edge technologies at high volumes—require billions in investment. A misstep in these areas, lax cost control, or lower-than-expected demand can severely decrease or even eliminate a company’s return on investment. Leading-edge chip design and manufacturing also require strong capabilities in research, supply chain, talent, and intellectual-property (IP) protection, as well as the ability to navigate government policies. While semiconductor companies may excel at some of these tasks, few have top capabilities across the board.
Given the extended time frames required to build fab infrastructure and enhance workforce skills, semiconductor companies need a long-term strategy for achieving design and manufacturing excellence—one that considers construction issues, equipment costs, and the need to enhance internal capabilities. Here’s a road map for moving forward.
Greater complexity and greater costs for semiconductor design and manufacturing
Over the past decade, the need for leading-edge technology leadership has transformed from an amorphous goal to an absolute necessity at semiconductor companies. In line with Moore’s law, the number of transistors on a chip roughly doubled every two years over that period, although the pace has recently slowed. While complexity has increased, structures on chips have shrunk in size.
Only a few companies are capable of designing and manufacturing the most advanced chips with node sizes of 14 nanometres (nm) and below because of the skills and large investment required for design, R&D, scaling, and other activities. Meanwhile, demand for these chips is soaring. In some major market segments, including artificial intelligence and machine learning, chips under 14 nm are critical because they combine strong performance with lower power consumption (see sidebar “Major markets for sophisticated chips”).
How We Help Clients?
Capital Equipment Manufacturer
We help clients stay ahead of technology trends, acquire intellectual property, and manage time-to-market challenges.
We help capital equipment companies stay at the forefront of modern semiconductor technology. Whether it’s keeping up with the pace of Moore’s Law via the latest innovations in lithography, etching, or new mask sets, or navigating the cyclical nature of the sector, we address these challenges and define technology strategies that bring the future into sharp focus. We use our cross-industry supply-chain expertise to help navigate the sector’s ever-larger and more complex supply chains. In addition, we have perspectives on the future of 450 millimeter wafers, which will require the design of a whole new generation of equipment.
In helping clients address these challenges, we have proven methodologies for improving R&D processes and decreasing time-to-market metrics by 15 to 30 percent. At the same time, we help capital equipment manufacturers improve their predictability and reduce cycle times for specific tools on the shop floor. On the cost side of the ledger, leveraging design-to-value techniques, clean-sheet analyses and other methods, we typically help clients reduce material costs by 15 percent or more.
In terms of the organizational challenges, we help clients discover root causes of past failures and then address these issues via changes in organizational structures and reengineered processes. We also help capital equipment manufacturers improve overall performance by transforming them from older manufacturing techniques to a modern performance culture.
This area draws on the Semiconductor Practice’s roster of more than 30 consultants, many of whom worked for semiconductor companies prior to joining Kanban. The rest have advanced degrees in mathematics, engineering, and physics, Human Resources which give them deep insights into all steps of the semiconductor value chain.
Electronic Design Assembly
We help clients capture growth opportunities in the electronics supply chain, while strategically managing their costs and production footprint.
The advanced electronics value chain is under intense pricing pressure, as customers push to lower end-market prices and increase market penetration. However, material, labor, and other operating costs continue to rise. With their core business generating slimmer margins, many original design manufacturers (ODMs) and component manufacturers are in search of new platforms to achieve growth targets. To create long-term value, we help these companies strike the right balance between core business performance and innovation at scale.
Our Advanced Electronics Practice supports electronic component manufacturers and distributors, ODMs, and electronics manufacturing service (EMS) firms. Our global team of over 25 consultants combines deep technical knowledge with proven business expertise across the value chain. We advise clients on topics such as growth strategy, innovation, portfolio strategy and diversification, mergers and Talent acquisitions, design to value, pricing, manufacturing excellence, purchasing and supply chain management, operational excellence, and performance and talent management.
Over the course of a client project, we work closely with experts in related practices, such as Semiconductors, High Tech and Telecom, Operations, and Corporate Finance. By collaborating with our Operations practice on design-to-value efforts, for example, we ensure clients meet their customers’ most important requirements and realize maximum value as efficiently as possible.
We work with clients to adapt their business and operating systems, pursue innovation, and capture value through strategic marketing and pricing.
The makers of electronic materials must navigate a number of challenges, including a capital-intensive industry in which R&D requirements are significant, and technology life cycles are brief. We can help:
Our Advanced Electronics Practice supports electronic device makers; silicon, wafer, glass, and other electronic materials providers; and subassembly and component suppliers of liquid-crystal display panels, LEDs, lithium-ion batteries, and solar cells and modules. Our global team of over 25 consultants combines deep technical knowledge with proven business expertise across the value chain. We advise clients on topics such as: operational benchmarking and performance improvement, energy efficiency and green manufacturing, innovation, market entry strategy, end-market demand, pricing, sales productivity and key account management, and organization and performance management.
Over the course of a client project, we work closely with experts in related practices, such as Semiconductors, Operations, and Corporate Finance. By collaborating with our Sustainability Practice on green manufacturing efforts, for example, we ensure clients bring cutting-edge facilities and equipment management practices to their factories. Likewise, by collaborating with our Consumer and Marketing practices, we develop fresh marketing and ingredient branding strategies to help clients capture the full value of their innovations.
We help clients improve productivity, optimize new product introductions, and keep pace with Moore’s Law.
The foundry landscape is a diverse segment of the semiconductor value chain. Some are global giants, with billions of dollars in annual revenue, while others focus on narrower specialty products, such as automotive chip sets or the processors that run consumer-electronics products.
All foundries struggle with cost-effective manufacturing at the edge of what is physically possible. The massive complexity of modern semiconductors makes it a constant challenge to keep cost, quality and manufacturing cycle times in line.
We help foundries reconfigure fab-floor processes to increase throughput and reduce cycle times. We go beyond lean methodologies and work with our clients to address the real sources of waste: complexity and variability on the fab floor. Another key part of our work is in crafting new product introductions that maximize impact, including ramping up production to meet demand in the crucial first months in the marketplace.
Our specialists blend hands-on technical expertise drawn from work on fab floors with rigorous business training. Through additional resources, such as our perspective on the future of Moore’s Law or the proprietary current and near-term business climate index for the semiconductor industry, we can offer clients unmatched insights for overcoming any challenge a foundry may face.
2. Integrated Device Manufacturers (IDMs)
We help clients reduce costs, run efficient manufacturing plants, and develop sharp go-to-market strategies.
Integrated device manufacturers (IDMs) need to conduct efficient and high-value R&D and identify the most promising pockets of market growth. At the same time, they need to contain manufacturing costs. Our specialists blend deep technical expertise with rigorous business training, and help IDMs find the right balance.
We help IDMs in a number of areas: optimizing R&D efforts, restructuring budgeting processes, increasing the efficiency of manufacturing facilities, improving time-to-market of product development, and defining M&A strategies for an era of industry consolidation. We also develop growth strategies that help clients identify meaningful pockets of opportunity outside their core markets.
The industry segment being served by IDMs is quite fragmented, which makes it more complicated to identify the best sales channels. As a result, we assist a number of IDM clients with sales strategies and go-to-market strategies, for both developed markets and rapidly developing markets, such as China, where the channel mix can be quite different than it would be in Europe or North America.
By definition, IDMs own their own R&D and production assets, so people strategies and operational excellence in manufacturing are also frequent challenges.