The Benefits of Business-to-Business Applications for Fabless Semiconductor Companies

Abstract

Companies in the semiconductor industry are rapidly adopting e-business to increase their transaction speed and operational efficiency. Device manufacturers, designers, and suppliers use advance information technologies to better interact with their business partners. The realized benefits are especially high for fabless semiconducter companies, which outsource their manufacturing processes to one or more partners. While outsourcing eliminates the need for high initial investments in manufacturing facilities, it limits the visibility of the fabless company to the manufacturing process. Thus, unless the fabless company takes some action to improve the level of coordination with their business partners, the complexity of the manufacturing process, its high degrees of uncertainties, and the global supply chain are likely to lead to excessively long lead times, especially when compared to competitors that own their own manufacturing facilities. This chapter studies the potential benefits of implementing a cross-enterprise application between a fabless semiconductor company and its manufacturing and assembly partners, benefits which are likely to be similar for other types of companies that outsource their manufacturing. We then present a case study of one specific fabless company that implemented an advanced application for cross-enterprise integration, and show the resulting benefits realized by that company.