Ensure stable and reliable supply of precious metal materials for semiconductors
Semiconductor Digest, April/May 2024
NORIAKI HARA, ANDREW FARRY TANAKA PRECIOUS METAL TECHNOLOGIES CO., LTD.
In seeking to achieve a stable supply of materials, semiconductor manufacturers face significant uncertainties in terms of geopolitical issues, human rights concerns, and environmental impact. What are the appropriate questions that purchasing managers and procurement specialists across the organization should ask suppliers of key metal materials—often including precious metals that can determine the characteristics of products—?
Adapting to Geopolitical Uncertainties
Geopolitical issues are among the most important challenges currently facing the semiconductor industry.
In recent years, as the world overcomes supply chain issues, it has become increasingly clear how quickly and completely the flow of materials between business models distributed globally can be disrupted. The supply of many rare earth metals, which are components of a very large number of products, has become particularly unsustainable. For example, Russia's invasion of Ukraine has led to a shortage of nickel and neon across the supply chain.
If a semiconductor company is unable to deliver as promised due to unstable supply of materials (automakers and mobile phone companies that depend on chips may effectively suspend operations), it will either incur substantial penalties or at the very least suffer significant damage to its brand and customer reputation.
As a result, it is proving increasingly important to have the flexibility to source metals and other materials from suppliers on a global scale.
The sources of supply for precious metals such as platinum, palladium, gold, and silver can ensure stable procurement from partners worldwide through the London Bullion Market Association (LBMA) and the London Platinum and Palladium Market (LPPM) and secure supply routes for materials. However, this does not end the complexities of modern business that the semiconductor industry faces in securing a consistent supply of chips.
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