IHS Webcast - Aftershocks in the Supply Chain

Welcome to Today’s Webcast

Aftershocks in the Supply Chain:
How to respond to crisis, assess global scenarios, and mitigate risk

April 21, 2011

We want your feedback!
Win an iPad2 for completing today’s survey

At the end of today’s webcast…
Everyone who completes the survey at
the conclusion of today’s live event will
be entered into a drawing to win an
iPad2.*

*Offer valid until April 29, 2011

2

Today’s Speakers:

Dale Ford
Senior Vice President, Market Intelligence
IHS iSuppli

Glenn Bassett
VP Strategic Business Development
Design & Supply Chain Solutions
IHS

3

The Japan Earthquake and
Managing the Impact on the
Electronics Supply Chain
IHS iSuppli Analysis and Commentary
Dale Ford
Senior Vice President, Market Intelligence Services

The Electronics Supply Chain

• Very global and interconnected…

Components Electronics Equipment
• Semiconductors • Data Processing
Memory, Microcomponents, Logic, PC, Storage, Printer, Monitor, Projector…
Materials Analog, Discrete, Optical Sensor… • Wired Communications
• Silicon • Flat Panel Displays Router, Switch, Modem, Metro, Long-
• Glass LCD, OLED, Plasma, DLP… Haul…
• Resins • Batteries • Wireless Communications
• Chemicals Rechargeable, Disposable, Fuel Cell… Mobile Phone, Media Tablet, Base
• Electromechanical Station, WiFi, Bluetooth…
• Metals
PCBs, Connectors, Antennas, Cables… • Consumer Electronics
• And more… TV, Set-Top Box, Camera, Game,
• Passives
DVD/Blu-ray…
Capacitors, Crystals, Filters, Inductors,
Resistors… • Automotive Electronics
Infotainment, Power Train, Safety, Body
Electronics, Comfort, Security…
• Industrial Electronics
Medical, Automation, Energy, Mil/Aero,
Control…

Manufacturing & Packaging | Inventory & Shipping

Copyright © 2011 IHS Inc. All Rights Reserved.
5

Equipment Production Disruption

Japanese Supplier Share of
• Data Processing – Mild Semiconductor Market
By Application Market
50%
Source – IHS iSuppli
• Wired Communications – None
40%

• Wireless Communications – Mild 30%

• Consumer Electronics – Moderate
20%

10%
• Automotive Electronics – Severe
0%

Overall

Automotive
Electronics

Electronics

Electronics
Data Processing

Consumer
Communications

Communications

Industrial
• Industrial Electronics – Market dependent

Wireless
Copyright © 2011 IHS Inc. All Rights Reserved. Wired 6

Key Components / Materials
Semiconductor Fabs
Silicon Wafer Production 3 1 Aizu Wakamatsu, Fukushima
A Shin-Etsu Kamisu, Ibaraki  ON Semiconductor (Logic)
 Fujitsu (Analog, Discrete, Memory)
B Shin-Etsu Nishigo, Fukushima  Texas Instruments (Analog, Optical)
2 Atsugi, Kanagawa
C MEMC Utsunomiya, Tochigi
6  Mitsumi (Analog, Logic)
D SUMCO Yonezawa, Yamagata 3 Goshogawara, Aomori
 Renesas (Logic)
13 10 9
4 Gunma
11
Display Manufacturing D  ON Semiconductor (Discrete, Logic)
 Hitachi Displays 1 Epicenter  Renesas (Analog, Discrete)
 Panasonic LCD B 5 Hitachinaka, Ibaraki
 Tohoku Pioneer  Renesas (Logic, Micro, Memory)
6 Iwate
4
14 Fukushima  Fujitsu (Micro, Memory)
Resins, Films, Chemicals, 12 C  Toshiba (Discrete)
Copper Clad Laminate… 5
8 A 7 Kofu, Yamanashi
7  Renesas (Analog, Logic, Micro)
2 Tokyo 8 Miho, Ibaraki
 Texas Instruments (Analog, Optical)
9 Miyagi
 Fujitsu (Logic, Micro)
 Rohm (Discrete, Micro)
10 Sendai, Miyagi
 Freescale (Logic)
11 Shiroishi, Miyagi
Source – IHS iSuppli  Sony Semiconductor (Logic)
12 Tsukuba, Ibaraki
 Rohm (Discrete)
13 Tsuruoka, Yamagata
 Renesas (Logic)
14 Utsunomiya, Tochigi
 Matushita (Discrete)
7

Supply Chain Impact & Recovery

Distance From Epicenter

Impacts
Supply Disruptions Brownouts Aftershocks & Workforce Disruption Infrastructure Damage Equipment &
& Limitations Logistics Interruption Rolling Blackouts Safety, Food, Gas Electricity, Water, Roads Building Damage

Time to Shipment Restoration
1 to 3 4 to 6 1 to 2 3 to 4 4 to 6
Weeks Weeks Months Months Months

Source – IHS iSuppli

8

Temporary supply chain relief

Semiconductor Supplier Inventory
40 90

35
80

Billions of USD
30
70

Days
25

60
20

15 50

Q109
Q108

Q208

Q308

Q408

Q209

Q309

Q409

Q110

Q210

Q1-11 E
Q310

Q4-10
Inventory Value Avg. No. of Days

Source: IHS iSuppli Q1 2011 Application Market Forecast Tool (AMFT) Source: IHS iSuppli Q1 2011 Semiconductor Inventory Tracker)

Copyright © 2011 IHS Inc. All Rights Reserved. 9

Race against the clock:
Semiconductor suppliers
• Freescale • Rohm
• Sendai – Will not reopen; Shifting production • Miyagi – Temporary stop operation again on 4/7 due
to aftershock; Restart initial production 4/17
• Fujitsu
• Tsukuba – Temporary stop operation again on 4/11
• Aizu Wakamatsu – Partial restart of operations on
due to aftershock; Restart initial production 4/13
3/23
• Iwate – Still in recovery; Assessing damage from 4/7 • Sony Semiconductor
aftershock • Shiroishi – Production still suspended
• Miyagi – Partial restart of operations on 3/28;
Assessing damage from 4/11 aftershock • Texas Instruments
• Miho – Restarted initial production; Target full
• Mitsumi production in mid-July; Relocated 80% of production
• Atsugi – Normal production restored during recovery
• Aizu – Expected to resume full production soon
• ON Semiconductor
• Aizu – Fully recovered • Toshiba
• Gunma – Ramping to full capacity • Iwate – Temporary stop operation again on 4/11 due
to aftershock; Restart initial production 4/18; Four
• Renesas months to full production
• Goshogawara – Temporary stop operation again on • Mie – Expect 80-90 percent production recovery for
4/7 due to aftershock; Restart initial production 4/12 May
• Hitachinaka – Working to restore both 300mm and
200mm lines; Partial operation of clean room on 4/10
• Takasaki – Restarted operations on 4/8
• Tsuruoka – Temporary stop operation again on 4/7
due to aftershock; Restart initial production 4/12

Race against the clock:
Key materials
• Silicon wafers (300mm) • BT Resin
• Shinetsu • Hitachi Chemicals
• Shirakawa – Target 70% production in June • Yamazaki - At 20% level on 4/20; Targets 40% May, 60%
• Gunma – Prospect of reopening still uncertain June, 70% July- Sept
• Kashima – Partial restart of operations on 4/11
• Polyvinylidene
• SUMCO
• Yonezawa – Partial restart of operations
• Kureha – Production suspended

• Covalent Materials • Other materials in process of recovery
• Kitakanbara – Still impacted by blackouts • Copper foil
• Hydrogen peroxide • Semiconductor mounting material

• Mitsubishi Gas Chemical • Photoresist
• Kashima – Currently at 30% supply; Target 70% in June • Semiconductor encapsulant
and 100% in July; Challenge to hit targets • Compound wafers
• ADEKA • LED chips
• Fuji – Operations suspended • Semiconductor gas
• Nippon Peroxide • Ultrapure water
• Koriyama – Restarted operations 4/7
• Crystal and quartz components
• Aluminum electrolytic capacitors • Aluminum substrates
• Nippon Chemi-con
• Miyagi – Two months to recover 100% capacity
• Nichicon
• Rubycon
• Note – Japanese suppliers control 70% of WW
production

Component supply health

Source: IHS iSuppli April 2011 Component Health Watch (CHW)

Impact – Renesas
Renesas Components in Selected Devices Source – IHS iSuppli Teardown Analysis

Product Type OEM Model Memory Logic/Micro Analog Discrete
Desktop PC Apple Apple iMac MB950LL/A 1 11
Desktop PC Asus Asus M3A76-CM 8
Desktop PC Asus Asus M4A78-EM 8
Nettop PC Apple Apple Mac Mini A1347 1 4
Nettop PC Apple Apple Mac Mini A1283 1 6
Notebook PC Apple Apple MacBook 1 6
Notebook PC Apple Apple MacBook 1 2
Notebook PC Apple Apple MacBook Pro 1 8
Notebook PC HP HP Pavilion dv6t 3
Notebook PC HP HP Pavilion dv6z 3
Notebook PC HP HP EliteBook 8440p 2
Notebook PC HP HP G62t-250 3
Notebook PC Lenovo Lenovo ThinkPad T410 1 5
Notebook PC Sony Sony VGN-CS215J/W 1
Notebook PC Toshiba Toshiba Protégé R700 11
UMPC Samsung Samsung NP-Q1EX-FA01US 1
UMPC Viliv Samsung X70 EX 1
Printer Sony Sony UP-D897 10
LCD TV Sharp Sharp LC-52XS1U Television 1 7
TV Receiver Sharp Sharp 'TU-X1U AVC System 2 3
Set Top Box Apple Apple TV 1
Set Top Box Samsung Samsung SMT-H6106 1
Set-Top Box Technicolor DirecTV H24-100 2
Speaker System iHome iHome iP97 1 1
Game Accessory Microsoft Microsoft Xbox360 Kinect 1
Game Console Nintendo Nintendo Wii 1

13

Impact – Renesas
Renesas Share of Global
Semiconductor Supply Renesas Components in Selected Devices Source – IHS iSuppli Teardown Analysis
Source – IHS iSuppli Product Type OEM Model Memory Logic/Micro Analog Discrete
44.0% Nokia 2320c-2b
Mobile Handset Nokia 1

Mobile Handset Nokia Nokia C5-00 1
Mobile Handset Nokia Nokia N8 1
Mobile Handset RIM RIM Blackberry Bold 9700 2
27.3%
Mobile Handset RIM RIM Blackberry Torch 9800 2
24.3% Samsung Galaxy S 8GB
Mobile Handset Samsung 2 1 1
Mobile Handset Samsung Samsung SGH-i917 2 1
Mobile Handset Sony Ericsson Sony Ericsson C901 1
Mobile Handset Sony Ericsson Sony Ericsson C905 1
13.0% Mobile Handset Sony Ericsson Sony Ericsson Vivaz Pro 1
Tablet Apple Apple iPad Wi-Fi + 3G 16GB 2
Tablet Apple Apple iPad Wi-Fi 16GB 2
3.9% Tablet Apple Apple iPad2 Wi-Fi +3G 32GB 1
Tablet Archos Archos 7900 1
Tablet Motorola Motorola XOOM 1
Automotive MCU
Automotive

Automotive Logic
Semiconductor

Electronics

MCUs

14

MCU revenues by market

$16.37 Billion

$5.08 Billion

Source: IHS iSuppli Q1 2011 Application Market Forecast Tool (AMFT)


Top Automotive MCU Suppliers

Source: IHS iSuppli Q1 2011 Competitive LandscapingTool (CLT)


Renesas automotive customers
Tier 1 Customers OEM Customers
Infotainment: • Alpine • Mitsubishi • BMW • Mazda
Head-Unit • Blaupunkt • Pioneer • Cadillac • Mitsubishi
• Continental • Xanavi • Chrysler • Nissan
Navigation • Delphi • Honda • Renault
Telematics • Denso • Hyundai/Kia • Toyota
• Hitachi • Mercedes • VW & Audi
Powertrain: • Aisin • Mitsubishi • Chrysler • Nissan
Engine control • Bosch • GM • Subaru
• Continental • Honda • Suzuki
Transmission • Denso • Mazda • Toyota
• Hitachi • Mitsubishi
Body & Comfort: • Continental • Honda
AC, seat control • Delphi • Mitsubishi
• Denso • Nissan
etc. • Mitsubishi • Toyota
Chassis & Safety • Bosch • Hitachi • Honda
Air bags, brakes, • Continental • Visteon • Hyundai/Kia
• Delphi • Nissan
etc. • Denso • Toyota

MCU Share of Automotive
Semiconductor Content



Top 22 MCU OEM Spend
(39% of Total MCU Market)

Source: IHS iSuppli H2 2010 OEM Semiconductor Spend Analysis


Medical electronics
semiconductor content profile

MCU = 14.7%; $1.3B

Source: IHS iSuppli Q1 2011 Application Market Forecast Tool

Power transistor & thyristor
revenues by market

$11.61 Billion

$1.94 Billion



Power Transistor / Thyristor Share of Industrial
Electronics Semiconductor Content



Top IGBT Suppliers

Source: IHS iSuppli Q1 2011 Competitive LandscapingTool (CLT)


Hewlett-Packard

Delta Electronics

Dell

Samsung Electronics

Panasonic

Sony

Apple

Cisco Systems

Siemens

LG Electronics

Denso

Toshiba
Top 22 Power Xstr / Thyristor OEM Spend

Bosch Group
(41% of Total Power Xstr / Thyristor Market)

Lenovo

Continental

Motorola

NEC

Ericsson

Acer

Hitachi

Huawei Technologies

Lite-on Group
24
Source: IHS iSuppli H2 2010 OEM Semiconductor Spend Analysis

Military / Aerospace
semiconductor content profile

Pwr Xstr Thyristor = 8.3%; $0.5B

Source: IHS iSuppli Q1 2011 Application Market Forecast Tool


Key Asian Electronics Locations
Japan
• 21% of Semiconductor Supply
• 49% of Optical Components
• 57% of Image Sensors
• 40% of Microcontrollers
• 33% of Display Drivers
• 60% of Silicon Wafers
• Key Materials and Chemicals

South Korea
• 59% of DRAM
• 49% of Data Flash Memory
• 18% of Small/Medium LCD Panels
• 51% of Large LCD Panels

Taiwan (Hsinchu)
• 67% of Pure Play Foundry
(Globally: 150 Fabless Semiconductor Firms > $30M)
• 24% of Semiconductor Supply
• 58% of Small/Medium LCD Panels
• 34% of Large LCD Panels

China (Shanghai)
• 80% of Mobile PCs

China (Shenzhen)
• 25% of Mobile Handsets

26

JAPAN AND GLOBAL RISK SCENARIOS

AGILITY IN RISK MITIGATION
BEST PRACTICE WORKFLOW

Glenn Bassett
VP Strategic Business Development
IHS Design & Supply Chain


Moving From Risk Identification To Risk Mitigation

• From Manufacturer & Commodity To End Units Impacted

• Identifying Components In My Business

• Linking Down To BOMS & End Devices

• Prioritize Key Components/BOMS/Devices

• Identifying Sources Of Inventory

• Leverage Alternate Sourcing Tools

• Identify Mitigation Plan Working With Suppliers

• Develop Counterfeit Mitigation Plan

• Longer Term Impacts


Moving From Manufacturer/Commodity To MPN

• Leverage Reference Database To Identify MPNs At Risk
• Analyze AVL For Linkage In Risk Components


Moving From MPN To BOM

• Leveraging BOM Tools In PLM,
PDM, Or In This Case IHS BOM
Manager Helps Move From MPN
To Affected BOM

• With BOM Identified, End Unit
Exposure Can Be Correlated
Shown: IHS BOM Manager


Prioritize Key Components, BOM, Devices

NPI Production Imminent
Proto-type / Pre-Production

In-production with near-term
delivery

• Prioritize End Unit Exposure
• Calculate Time Horizon / Revenue Risk Profile
• Prioritize Through End Unit Back To Component
Calculate Inventory Need & Priority


Where can I get this?

Where Does Current Inventory
Exist?
• Direct from the Factory
• Approved Vendor / Manufacturer
(AVL / AML)
• Franchised and Authorized
Sources
• Approved Independent Distributors Shown: IHS BOM Manager

• ERAI Members
• Valid Alternate Parts or Sources

Shown: IHS-ERAI


What alternatives exist?

Equivalent Parts?
Upgrades? Downgrades?
Functionally equivalent options?
Are they ROHS Compliant?


Choices

• AVL Or Alternate
• Authorized Channel Inventory
• Secondary Market

• Inventory Investment
• Bridge Buy
• Making Bets On Near Term Recovery Or Redesign
• Lifetime Buy
• Mitigating Greater Risk Time Horizon


Counterfeit: Industry Standards & Reports
GIDEP and ERAI are the counterfeit reporting entities

DoD Adopted the SAE AS5553 91% of reports to date via ERAI


The Last 6-Years of Component EOL
2009 – Economic Events Drive EOL: What About 2012
Manufacturer-Issued End of Life (EOL)
Distribution of EOL by Dominant Business Driver
Technology
100% < 25% of Change
90%
Demand-Side Drivers
80%
~90% of EOL in 2009
70%
Unspecified / Administrative
60% Supply Side
Organizational
50%
Innovation, Technology, and Manufacturing
40% Environmental Compliance
Demand-Side
30%

20%
Impact of RoHS
10% Compliance
0%

2004 2005 2006 2007 2008 2009


Moving From Risk Identification To Risk Mitigation

• From Manufacturer & Commodity To End Units Impacted

• Identifying Components In My Business

• Linking Down To BOMS & End Devices

• Prioritize Key Components/BOMS/Devices

• Identifying Sources Of Inventory

• Leverage Alternate Sourcing Tools

• Identify Mitigation Plan Working With Suppliers

• Develop Counterfeit Mitigation Plan

• Longer Term Impacts


Free Offer for Attendees: Risk Analysis
We will do a BOM risk assessment for webcast attendees

Fill Out Our Survey and Specify “YES” to Free Analysis*
Or Send Email with Subject Line “April 21st Webcast Offer” to Webcasts@ihs.com
*Limited to qualified electronics value chain entities.


Example: Counterfeits
Problems are immediately flagged and the BOM can be monitored thereafter

Actual Medical Devices Bill of Material (4 of 94 electronic components)

“IC's were failing to boot up.”

“Maxim stated in writing that they did not manufacture the product shown in the below noted
photographs. The lack of a country of origin and other visual nonconformities suggest the parts in
question have been remarked by an unauthorized third party.”

“Test report shows parts not performing up to spec, incorrect voltage.”


Contact us: What do you need to know?
How can IHS provide information and insight to help you?

Client Scenario(s) : “How will this impact my supply chain?”
What are my regulatory obligations and Conflict Minerals Origin: Conflict-free tantalum.
exposure to U.S. or California conflict
minerals positions?
Supply Flow: Tantalum capacitors, have already
Which commodities do I use that rely on been in short supply now for over 12 months.
Explicit: Conflict tantalum, gold, tin, or tungsten? What
Minerals Tracking products do I use these in? Impact and Implications of Global Production:
•Global Reaction to Crisis will See Panic Buying
Where are my raw materials,
Creating Shortage and Pricing Issues
manufacturers, and suppliers located? Was
•Rolling Power Outages and Logistical Issues
any Japan production ceased or
Expected for the Next Several Weeks
compromised?
•Production Disruption of Critical Materials such as
Poly Silicon, Photo Resists & Resins
What shortages should I expect? Will price
•Components Impacted Include
and lead time increase? Should I buy parts I
NAND
need immediately to mitigate risk?
DRAM
Standard Logic
If needed, where can I locate and secure
Filters
alternate sources of these parts? Should I
Inductors
redesign my product?
High-Value and High-End Aluminum and
What parts will be discontinued by Ceramic Capacitors
manufacturers? Have any been discontinued MOSFETs
already? Which ones?
Likely Rise in Counterfeit Part Activity:
How do I avoid counterfeits? Do I have any Just prior to Japan quake, the senate launched
today that I don’t know of? What specific congressional investigation counterfeit parts risk.
lots of parts are counterfeit? Among reasons, a 2010 study by the Commerce
Department found the problem of counterfeit parts
If a highly constrained supply chain touched nearly 40% of the DoD's parts supply
Implicit: Risk of persists – or parts were discontinued – what chain, and was getting worse.
Counterfeit Parts safer open market part sources exist?


Join the Conversation
Follow IHS on Twitter…
Get the latest supply chain news,
updates and trending topics from
@IHS_SupplyChain

Mention
@IHS_Supplychain
and today’s webcast
for an additional
chance to win an
iPad2*

*Offer valid until April 29, 2011.

We want your feedback!
Win a iPad2 for completing today’s survey

Survey Offer:
Everyone who completes the survey at the
conclusion of today’s live event will be entered into
a drawing to win an iPad2.*

*Offer valid to all survey respondents until April 29, 2011.

Risk Analysis/BOM Assessment:
1) Complete the Survey and Specify “YES” to Free
Analysis or
2) Send Email with Subject Line “April 21st Webcast
Offer” to Webcasts@ihs.com**

**Limited to qualified electronics value chain entities.

42

Questions?

Send questions and requests for information to:

Webcasts@ihs.com

43

IHS Webcast - Aftershocks in the Supply Chain

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (7)

Similar to IHS Webcast - Aftershocks in the Supply Chain

Similar to IHS Webcast - Aftershocks in the Supply Chain (20)

More from Tevia Arnold

More from Tevia Arnold (11)

Recently uploaded

Recently uploaded (20)

IHS Webcast - Aftershocks in the Supply Chain