Supply and Demand Analysis of a Hardware & Software Company Venturing into the Field of Semiconductors

A US-based small-scale hardware & software company turned its direction towards manufacturing semiconductors and was trapped in the conundrum of market analytics. The majority of their resources were forced to focus on meeting the dramatic spike in demand. This restricted business growth. To integrate an effective supply and demand equilibrium strategy through technical and marketing innovations, the company's leadership appointed Research Nester Private Ltd.

An overview:

A small-scale hardware and software company ventured into manufacturing semiconductors in 2018. The firm has a wide range of services to offer: engineering services, device design fabrication, equipment maintenance, Machine shop, and material characterization. But it wasn't enough to strategize growth and productivity just by analyzing demand patterns and supply trends of competitors.

Manufacturing semiconductors is like stepping into a world of advanced, cutting-edge, technologies. Despite this, the company lagged in the critical component of digital integration.

The demand for semiconductors had been growing rapidly, resulting in severe strain on the manufacturing and logistics capacity of the chip industry before the Pandemic. For several reasons, COVID-19 has caused an enormous increase in this stress.

First, it disrupted both the supply chain and access to employment by making things more complex for shipping and transport operators. With 25% of their highly skilled workforce home sick or quarantined, semiconductor plants are far too technical to continue to operate effectively, unlike some other production plants.
Second, by boosting a new wave of digital transformation and remote work, the pandemic further increased the demand for semiconductors. It is significantly more complex and requires a higher degree of data storage and analysis on cloud computing platforms, to digitally transform the product, service, or process. Also, the demand for edge devices such as sensors and portable electronics like cell phones and laptop computers has increased due to a dispersed workforce. All this technology, of course, is built on chips that are made out of semiconductors.

All these factors made supply chain management a significant demining point for the company. The Management realized that the company would need expert assistance in establishing a plan of action for drawing up forecast market scenarios relating to demand and supply. To facilitate long and sustainable growth with profitability, it sought the services of Research Nester.

The Story

The hardware and software company was established in 2015. It gained much success in its proliferative arena in a short period. In 2018, the company proceeded into the manufacturing of semiconductors. However, faced challenges related to data latency, front-end (FE) built output needs added manufacturing steps, and restricted end-to-end supply chain visibility and planning, which they failed to recognize during their analysis. This resulted in supply constraints for finished products. Further, the seamless customer experience was to be considered for the overall performance of the company. This led to missed sales opportunities, and financial losses to a great extent were caused by an excess stock of unsold materials. To find a solution to the problem, the authorities asked Research Nester to act on their behalf.

The Solution:

The lack of in-depth research on the supply and demand scenario for semiconductors foundry has been a key problem for the company. To help organizations, understand market logistics and focus on mitigating risks related to supply and demand, Research Nester offered a solution for supply and demand analysis consulting services. The following roadmap for a better future has been suggested by the RNPL consultants:

Diversifying the company’s business model by offering data and services in addition to materials and products.
Integrating various business functions from supply chain management, finance, and manufacturing to partner management and customer service.
Reduction of costs with due regard to the quality and delivery of products on the market.
Switch to in-house production
Protection and security of equipment for which special care is required.

By implementing these measures, the company could optimize its inventory, manage its supply chain issues and also strategize its production requirements according to the current market scenario.

Results

The company was facing supply-chain issues, and its revenue had gone down severely. The percentage growth of the company in the first year of manufacturing semiconductors (2018) went down drastically; the situation worsened with the coming of COVID-19, and the supply chain market became volatile altogether. By 2021, the situation was getting out of hand, so the managing team brought in Research Nester analysts to reprimand the situation and manage the existing chaos. The analysts, after a thorough study, recommended a strategic model, keeping in mind the prevailing market demands, the problematic supply chain issues, and the pandemic factor. After inculcating some of the approaches, like in-house production and diversifying business models, the company's growth percentage increased. All of this was contributing to the maximization of its revenues. The company was able to increase its position in the markets and subsequently make profits, thanks to a more thorough understanding of market mechanisms as well as an intensive analysis of current and foreseeable trends proposed by Research Nester.

Supply and Demand Analysis of a Hardware & Software Company Venturing into the Field of Semiconductors

An overview:

The Story

The Solution:

Results

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