By: Neena Akerkar and Nikhil Ankalikar

The semiconductor industry has received significant attention due to the impact of the COVID-19 pandemic on chip shortages. As a crucial component in various industries such as automotive, computing, telecommunications, and healthcare, semiconductors play an indispensable role in the global economy. To address the unique challenges and complexities of the semiconductor industry, the SAP S/4HANA Ecosystem, complemented by LTIM’s value-added solutions, offers a comprehensive digital transformation approach. In this post, we discuss the challenges faced by the industry and how the combination of SAP S/4HANA and LTIM’s Reimagination Studio Platform can significantly enhance the efficiency and effectiveness of digital transformation initiatives.

Semiconductor Industry Overview

The semiconductor industry encompasses companies involved in designing and fabricating semiconductors and semiconductor devices. With revenues doubling every decade, industry analysts predict that semiconductor revenues will surpass $1 trillion by 2030. Semiconductor companies can be classified into Integrated Device Manufacturers (IDMs), Fabless semiconductor companies, semiconductor testing, assembly, and packaging providers, and semiconductor equipment manufacturers.

Key Challenges in the Semiconductor Industry

• • Manufacturing challenges: Semiconductor manufacturing processes are highly complex, involving advanced methods, state-of-the-art equipment, and cutting-edge technology. High yield percentages, innovation despite lengthy manufacturing cycle times, and end-to-end visibility in supply chains are some primary challenges. The industry is divided into the typical Frontend and Backend operations as depicted below. Cycle time for FE operations take 6-14 weeks while BE operations take 1-3 weeks.

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• Economic pressures: High competition and substantial CAPEX & R&D costs financially strain IDMs, Fabs, and semiconductor equipment manufacturers.
• Supply chain strains: Recent events such as the COVID-19 pandemic, the US-China trade war, and geopolitical pressures have exposed the semiconductor industry’s vulnerability to external shocks.
• Other challenges: Speedy innovations, sustainability compliance, talent shortage, short product lifecycles, and data latency in business processes pose additional hurdles for the industry.

SAP S/4HANA Ecosystem and LTIM’s Value-Added Solutions

To address the challenges of the semiconductor industry, LTIM’s industry solution using SAP S/4HANA Digital Ecosystem focuses on improving collaboration, visibility, and insights. The solution encompasses integrated planning, source-to-pay, plan-to-deploy, quote-to-cash, idea-to-launch, enterprise asset management, plan-to-cost, and record-to-report value streams.

LTIM’s Reimagination Studio Platform

LTIM’s Reimagination Studio, built on the SAP Business Technology Platform (BTP), is a foundation for the Hi-Tech Semiconductor Industry Value Canvas. The platform connects business KPIs to 120+ business capabilities, 140+ process capabilities, and 140+ process KPIs. By leveraging the Reimagination Studio, businesses can accelerate solution adoption through reference process flows, design documents, and test scripts.

Benefits of LTIM’s Semiconductor Solution Using Reimagination Studio Platform

LTIM’s Reimagination Studio Platform offers the following key benefits:

It improves visibility and collaboration across end-to-end processes in the value chain.
It enhances decision-making capabilities by identifying key design decisions and role-based personas.
Process analysis using the SCAMPER technique and accelerated solution adoption using a starter pack comprising reference process flows, design documents, and test scripts.

To conclude, digital transformation in the semiconductor industry is a complex and continuous journey. LTIM’s solutions, built on SAP S/4HANA and the Reimagination Studio Platform, provide a solid foundation for businesses to navigate this journey effectively. By addressing the industry’s unique challenges and requirements, these solutions empower organizations to stay competitive and agile in an ever-evolving landscape. As LTIM’s Center of Excellence (CoE) team continues to monitor industry trends and refine its offerings, semiconductor companies can leverage these advanced tools and solutions to turn their digital transformation visions into reality, driving innovation, efficiency, and growth in this dynamic and high-tech industry.