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Ensuring a Stable, Responsible Supply of Precious Metal Materials for Semiconductors
Semiconductor Digest April/May 2024
NORIAKI HARA and ANDREW FARRY, TANAKA Kikinzoku Kogyo K.K.,
IN THE QUEST TO ACHIEVE A STABLE SUPPLY of materials, semiconductor manufacturers face considerable uncertainties in terms of geopolitical issues, human-rights concerns and environmental impact. What are the right questions for purchasing managers and procurement professionals throughout the organization to be asking their suppliers of limited key metal materials, including the precious metals on which their products often depend?
Adapting for geopolitical uncertainties
Geopolitical issues are one of the most important challenges facing the semiconductor industry today.
As the world has battled through supply-chain issues in recent years, it has become increasingly clear how quickly and totally that timely flow of materials can be interrupted across globally distributed business models. The supply of many rare-earth metals that form the components to so many products has been exposed to be especially unsustainable. The Russian invasion of Ukraine, for example, precipitated shortages of nickel and neon throughout supply chains.
If a semiconductor company fails to deliver on its promises because of unstable supply of materials – effectively shutting down an automotive or cellphone company which depends on the chips – it might be liable for substantial fines or at least tremendous damage to its brand and customer reputation.
So the flexibility to source metals and other materials from globally scoped suppliers has proven increasingly important.
Suppliers of precious metals such as platinum, palladium, gold and silver can achieve stable procurement from partners around the world through the London Bullion Market Association (LBMA) and London Platinum & Palladium Market (LPPM) to secure supply routes for materials. But that is hardly the end of the contemporary business complexities for securing a consistent chip for the semiconductor industry.
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