Rom report july 2024 2 - Flipbook - Page 4
The Five Biggest Disruptions to the
Semiconductor Supply Chain in 2024
1.
Natural Disasters Striking Global Chokepoints
The semiconductor supply chain is increasingly vulnerable to natural disasters, exacerbated
by climate change. Taiwan’s TSMC, a critical player in the industry, faced signi昀椀cant challenges due
to droughts affecting their water supply, crucial for manufacturing processes. These events highlight
the growing threat of natural disasters, such as earthquakes in Japan and typhoons in Malaysia,
which disrupt key operational bottlenecks.
2.
Obsolescence Risks
Component obsolescence remains a signi昀椀cant threat, with an estimated 474,000 parts reaching
end-of-life (EOL) in 2023. The accelerating pace of technological advancement shortens the
lifecycle of semiconductors, increasing the frequency of EOL notices. This trend necessitates
robust risk mitigation strategies, including multi-sourcing and lifecycle forecasting, to maintain
operational resilience.
3.
Factory Shutdowns
Factory shutdowns due to 昀椀res, natural disasters, or other emergencies can cause substantial
disruptions. Recent incidents at Renesas Electronics and ASML underscore the industry’s
vulnerability to facility stoppages. Given the high risk of 昀椀res and the critical nature of continuous
operations in semiconductor manufacturing, any shutdown can have far-reaching effects on the
supply chain.
4.
Vulnerable Shipping Routes
The semiconductor industry relies heavily on maritime shipping, with key routes like the Red Sea
being critical chokepoints. The ongoing con昀氀ict in the region, exacerbated by attacks on commercial
vessels, has signi昀椀cantly impacted shipping through the Suez Canal. This has led to longer shipping
times and increased costs, affecting the global supply chain.
5.
Trade Wars, Sanctions, and Export Controls
The U.S.-China trade con昀氀ict continues to disrupt the semiconductor industry, with export controls
and sanctions impacting key players like Nvidia, Intel, and AMD. Micron Technology, for example,
faces restrictions from both the U.S. and China, affecting its revenue and operations. These
geopolitical tensions create uncertainty and complicate manufacturing practices.
These disruptions illustrate the complexity and fragility of the semiconductor supply chain.
As the industry navigates these challenges, companies must adopt comprehensive risk
management strategies to mitigate the impacts and ensure continuity.
Source: Z2Data Article Published last July 1, 2024xs
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