10 questions about semicon logistics with expert John ...

We spoke to Semicon Logistics expert John Desmond about the launch of a new air logistics offering tailored specifically to the Semicon industry and the future outlook of the sector.

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Hi John, nice to meet you. Tell us, how did you come to be in your current role? What path did you take?

Well, I&#;ve actually come full circle, believe it or not. I graduated as an engineer in microelectronics and power electronics before moving into the semiconductor industry and spending many years all around Europe installing equipment into various semiconductor sites. I then moved across to a Contract Electronic Manufacturing company who at the time were involved in the mobile repair industry. I was with them for 10 years travelling around Eastern Europe while progressing up the management ladder. It was while I was moving a plant from Holland to the Czech Republic for this CEM, that a leading logistics company recruited me because they had a requirement for someone with HiTech in-depth knowledge to drive this element into their logistics offering to the Electronics Manufacturing companies. Then around six months ago I moved across to Kuehne+Nagel because they were interested in somebody with semiconductor knowledge, which brings me all the way back full circle in a way.

Semiconductors seem to travel a lot during their manufacturing process &#; why is that?

They do travel a lot, and that&#;s largely because each element of the manufacturing process is very specialised and the need for efficiency and productivity is very high coupled with very small tolerances and requires specific equipment. From design, through manufacturing, the silicon wafers are then diced into chips that are assembled into packages to form the electronic components that can be tested before mounting onto circuit boards. There are numerous global companies employing thousands of people around the world in these highly automated processes.

A new air logistics offering was recently launched tailored specifically to the semiconductor industry. Why was that?

So, the reason we needed a specific offering for Semicon, is that the pieces of equipment that make the end product, that is the integrated circuit or semiconductor (as well as the end product itself) are built to such a high tolerance that you need to take very special care when moving them. They are so sensitive that for example that they can&#;t travel on a regular truck. They need to be transported on an air ride truck to reduce vibration and shocks from the road. With some pieces of high end equipment that are shipped via air we even stipulate the number of G&#;s that the equipment can be exposed to. Heat and humidity can also affect these high end units and when you&#;re dealing with pieces of equipment that can cost up to 100 million dollars each, the stakes are very high. So, we have designed an offering that addresses all those needs.

Can you explain a little more about what that is and how it works?

The offering is based on the &#;SemiconChain&#; quality standard that guarantees process standardisation, continuous improvement, and service excellence across the dedicated Semicon network. SemiconChain is built on a quality foundation tailored explicitly to the Semicon industry and integrates ISO - and IATF , ensuring that shipments are always transported in a standardised, robust manner providing complete tracking visibility. So, if for instance you were shipping a piece of kit into Europe, you would want to go via one of our &#;SemiconChain&#; hubs like Frankfurt because everyone there who deals with semicon equipment knows exactly what they&#;re dealing with and how to understand the customer&#;s specific request when it comes to handling semiconductor capital equipment.

How do you see the semicon market evolving in the next few years?

Well, incredibly, semiconductors still seem to be adhering to Moore&#;s Law, which is that the number of transistors in a dense integrated circuit will double every two years. This means that everything will continue to become ever more powerful, sensitive and valuable, and we in turn will need to adapt and grow our offering to match the associated needs. It&#;s going to be really interesting over the next 5 years to see how we can push the boundaries of the supply chain.

You also offer a time-critical solution for the most urgent shipments powered by Quick. Can you tell us about that?

I think that Time-Critical powered by Quick will become one of the pillars in our new offering. The reason being that when you have a piece of equipment worth 100 million dollars, pumping out chips worth 100s of millions you cannot afford any down time.

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What are semiconductors and why do they matter?

The generic term semiconductor refers to a material which can both conduct electricity (like copper or aluminium) and insulate (like rubber). More commonly when we refer to semiconductors, what we mean is semiconductor devices, or &#;chips&#; (microchips).

Chips are created using semiconductor materials, giving the industry its name. They are crucial elements of almost all electronic devices, varying by function and intelligence. The &#;smarter&#; the device, the more &#;intelligent&#; the chip needs to be, from your mobile to your refrigerator or car. As such, semiconductor manufacturers benefit directly from the rise of digitalisation in society provided they invest in their businesses sufficiently to capitalise on that opportunity.

Semiconductors directly enable technological innovation in other industries and will continue to do so as new products are developed, both in emerging markets and the rest of the world. Firms in this industry are hugely concentrated in emerging markets, especially Taiwan and Korea. Companies in these geographies supply customers across the globe with their products for use across many areas such as computing, communications, consumer electronics, automotive and industrial equipment.

Semiconductor manufacturing process

Semiconductor manufacturing is a critical industry which manufactures integrated circuits - these are sets of electronic circuits on a semiconductor material (or wafer) which is typically made from silicon. The process is highly sophisticated and involves three key steps:

1. Making the raw wafer


The silicon wafer is created from a cylindrical ingot which is then sliced into discs roughly 1mm thick. The ingot can be a range of diameters including 150mm and 200mm but most commonly it is 300mm. The majority of semiconductor manufacturers outsource wafer production, purchasing them from a specialist wafer manufacturer.

2. Making the circuit on the wafer (making the microchip)

The chips are created in batches on the silicon wafer, with multiple chips being manufactured at the same time at a minute scale with thousands of automated steps.

3. Completed components are assembled and packaged

An integrated circuit (IC) is a single semiconductor (semi) chip which has other components all integrated. These may include diodes, resistors, transistors or inductors, for example. ICs help to support complex circuits.

Chips are created in batches on the wafer. The factory in which this takes place is called a fabrication plant, or fab. There are high barriers to entry with costs of building and operating a fab reaching tens of billions of dollars.

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