They must adopt collaborative supply chain planning processes to improve customer service levels and reduce inventory risk. Any industry will benefit from better balancing of supply and demand, but the need is intensified for semiconductor vendors and their trading partners.
Many products have long manufacturing lead times that complicate quick reaction to demand swings.
New fabrication capacity is expensive and results in capacity increasing in large increments. These challenges are driving semiconductor vendors to investigate better ways to manage production and distribution commitments to customers. Too often, this results in a complete lack of useful information. Many semiconductor vendors use information from internal production systems to optimize their operations but take little account of data from trading partners. Most will share capacity availability information with customers only when pressured to do so.