RESEARCH REPORT
Semiconductor manufacturing: Think globally, build locally
Leading practices for onshoring semiconductor manufacturing
5-MINUTE READ
August 23, 2023
In brief
- With the help of the U.S. and EU Chips Acts, the semiconductor industry is in a time crunch to capture funding and onshore manufacturing operations.
- We’ve identified 4 steps and industry examples to support the onshoring journey and create pathways for success.
- This thought leadership research is based on client interviews and experiences, paid interviews, Accenture research and third-party research.
How we got here
Many semiconductor companies are in the early stages of onshoring their fab (fabrication plant) operations supported by government incentives, notably the $52 billion U.S Chips and Science Act and the €43 billion European Chips Act. These investments highlight the demand to further the industry, increase supply chain resiliency and promote national security.
Taking these developments into account, we interviewed industry executives to learn about the state of onshoring and challenges that were impacting their manufacturing strategy. Each interview offered insights and examples of success for companies to build, run and optimize fabs.
1. Create an internal capability to engage in public-private partnerships (PPP)
Billions are flowing from the government and industry into the market. Regardless of government action, capital expenditures in the semiconductor industry are driven by demand and technology innovation. Public-Private partnerships could reduce potential confusion and create proactive engagement with local and federal government officials. These relationships creates a dialogue that can help manufacturers stay ahead of unfolding deadlines and requests during the infrastructure development.
It's hard to invest in manufacturing, but since the government is covering a lot of expenses, it's money on the table. If you don't take it now, competitors will take it first
Director of Product Marketing - Analog Devices
2. Rethink talent strategies
The need for talent is as critical as the fab’s physical construction. The demand is deep, but the pool of available talent is shallow. Executive interviews hinted on a reoccurring theme that geodiversity hiring could help companies build their talent pipeline. Once staffed, companies could address long-term delays and on-boarding challenges by deploying more automation. The strategy focuses on automating operational efficiencies and training the right talent to work hand-in-hand with technology to run the fabs as efficiently as possible.
34%
of workers are very confident that that their skills will be of use and value in 3-5 years.
56%
of high tech innovators plan to increase their investment in emerging technologies to automate certain tasks on the manufacturing floor.
28%
less than a third (28%) of STEM-educated workers were working in a STEM job.
3. Become radically proactive about security and emerging technologies
Security in fabs is not just about securing the equipment and physical building, but also securing the technologies used to operate the manufacturing and also the IP of the product. To be proactive with security, companies should be deliberate in their actions to develop a holistic analytical approach to the full environment.
There is a trend of executives expressing an emphasis on advanced technologies and capabilities to improve inputs and outputs. A repeat technology mentioned from interviews was metaverse and the exponential improvements of building a factory floor and to run their operations remotely.
4. Re-assess ROI expectations
The time frame from planning to launch is tightened as new talent, change management and introducing new partners adds complexity. These factors can decrease time, increase projected costs and impact projected ROI. A clear roadmap with the right level of stakeholder engagement creates the capability to manage ROI expectations in a collaborate way.
Short-term profitability depends on whether the investment plan and business plan five years ago have progressed smoothly. We recognize that it is nothing more than an instantaneous wind speed in the long-term investment recovery plan.
General Manager of the Corporate Strategy Office, Japanese electronic parts manufacturer