Concentration Creates Fragility
Over the last 23 years, the semiconductor industry has undergone extreme consolidation. Today, only three companies manufacture the most advanced leading-edge silicon, Sturm says. The majority of this manufacturing—80%—takes place in Asia. The U.S. and the European Union account for the remaining 20%.
The Problem
To Achieve Stability, Start With Global Balance
The Solution
Manufacturing in Asia
Manufacturing in U.S. and EU
80%
20%
The concentration of manufacturing in one region can create fragility that raises the risk of rapid, large-scale disruption that can result in global shortages for everything from cars to appliances.
Intel is partnering with the public sector to create a more geographically balanced manufacturing capacity. The company has set a goal to bring 50% of the world’s semiconductor manufacturing into the U.S. and the EU by 2030. Major new construction projects are now underway to create leading-edge chip factories, research and development sites and back-end production facilities.
Intel is enabling businesses to take advantage of this increasing geographical distribution with a new way of operating. Traditionally, Intel has both designed and manufactured the majority of the products it sells. Intel Foundry Services (IFS) now allows customers to specify their chip designs and then have Intel manufacture them. This means that a company whose specific chip needs were
once only offered by a company with manufacturing processes in Asia, for example, can now get access to Intel’s global capacity. If one arm of the worldwide production process is disrupted, Intel’s facilities elsewhere on the planet can continue producing the chips, insulating the customer from manufacturing interruptions.
Shifting to more industry standards-based design tools allows Intel to quickly convert customer specifications into manufacturable products, which accelerates customers’ time to market.
This means it can offer chip manufacturing to a broader set of customers outside its traditional base of PC and data center clients. The U.S. Department of Defense, for example, is an early user of this service. “Our customers can leverage our supply chain’s resilience to bolster their own value chains and make them more resilient as well,” Sturm says.
Climate Events Compromise Resilience
A supply chain can never be truly robust while it’s at the mercy of preventable climate shocks—which is why Intel is working to reduce the semiconductor industry’s environmental footprint and build a more sustainable future of computing. “If you do the right thing, as a foundation in your business, it makes you stronger in multiple ways,” Sturm says.
To achieve lasting change, long-term planning is essential. Twenty years ago, Intel co-founded the Electronics Industry Citizenship Coalition, now the Responsible Business Alliance, with like-minded organizations. Members of this alliance agree to a code of conduct, specifying a series of social, environmental and ethical industry standards.
“
The Problem
To Endure,
You Need To Protect The Environment
The Solution
• It used 100% renewable energy in the U.S., EU, Israel and Malaysia. That’s partly due to 110 alternative and renewable electricity installations across 22 Intel campuses, including solar heating and cooling systems, geothermal energy and micro wind turbine array systems.
• It conserved approximately 9.6 billion gallons of water, partly through technology-optimized water management. It also continued its watershed restoration projects in areas around its manufacturing sites.
“Resilience and sustainability must be seen as not ‘either or’ but as an ‘and’ for corporations and customers,” Sturm says. “It’s the right thing to do. It helps improve business outcomes, and it’s something that is essentially a social and environmental mandate.”
Over our 55 years, we’ve delivered a continuous drumbeat of substantive solutions to support our communities around the world, while at the same time strengthening our own supply chain and ecosystem.”
Jackie Sturm
Corporate Vice President of Global Supply Chain Operations, Intel
In 2022, Intel’s sustainability initiatives led to significant climate wins:
• It achieved a manufacturing waste upcycling rate—the amount reused, recovered or recycled—of 67%. Sulfuric acid waste, for example, is processed to become technical-grade sulfuric acid, which can be used in on-site wastewater treatment systems.
Humans Have Limitations
Supply chains must be able to nimbly adapt to disruptions. Given the complexity of these networks, embracing AI-driven insights and automation is key to making this happen.
Intel has been using advanced analytics and control automation in its factories for two decades, and collects real-time manufacturing data that can automatically detect defects, automate inspections and enhance process efficiency throughout the semiconductor manufacturing cycle.
AI algorithms can also analyze vast quantities of data to balance projected supply and demand, and to help identify new markets and potential products.
Like Intel, other companies can outfit their equipment with AI sensors and use AI-based supply chain management platforms to gather operational data that helps them stay one step ahead of changing circumstances.
That’s a business imperative, Sturm says. “The fastest companies are going to have more options available to them.”
AI can also support governance and compliance activities. Companies can use the technology, for example, to comprehensively track the chain of custody of materials used in the manufacturing process to assess their sustainability.
“
Where artificial intelligence comes into play, it's in the area of sensing, and that is what's going to help the supply chain stay at least a little bit ahead of disruptions.”
Jackie Sturm
Corporate Vice President of Global Supply Chain Operations, Intel
The Problem
To Optimize,
Look To AI
The Solution
Building The Supply Chains Of The Future
From global rebalancing to sustainability initiatives, Intel is finding effective ways to build a more resilient supply chain in the semiconductor industry and beyond.
It’s a road map that can inform the actions of business leaders in other fields too.
“It’s my hope that by driving both structural and operational improvements, by learning more and having more transparent supply chains and by putting more intrinsic resilience into our supply chains, we’ll be able to make the promise of uninterrupted supply a literal reality for our customers in the future,” Sturm says.