Ron Jones, CEO and founder of N-Able Group International is an authority on the fabless and outsourced manufacturing business model. He chaired the GSA (Global Semiconductor Alliance) Business Management Systems Committee during the 14 years of its existence, and became familiar with Tensoft’s products and services then. The following is a partial transcript of an interview with him.
Q: What Kind of Systems do Fabless Semiconductor Companies Need to Run Their Operations?
What do semiconductor companies need? This is no simple one-system-fits-all answer. A variety of business, engineering and manufacturing systems make up a semiconductor company’s arsenal. Each is distinctive and targeted to support a specific part of the semiconductor requirement.
First, they need systems to support the semiconductor manufacturing process itself, which is unique in the manufacturing world. ERP systems are designed for managing the building of cars, computers or airplanes. This is described as discrete manufacturing. Semiconductors are process flow manufacturing and are NOT a good fit for the algorithms built into ERP systems.
Let me explain. In discrete manufacturing, you typically take a bunch of individual components or parts and put them together into a subassembly. You then take several subassemblies and put them into a higher level subassembly and so on until you have a 747, for example.
In semiconductor process manufacturing, we start with a mask set and a production lot of wafers and perform hundreds of operations using the masks and wafers. As we go through wafer fab, we may use alternate masks at some steps, thus creating different product dies. When we finish wafer processing, we may use different test programs to sort the chips into further different types. When the probed wafers go to assembly, they can go into multiple packages and then that package/chip combination can be tested to different limits. This structure is referred to as an “inverted” or “one-to-many” bill of materials (BOM). So one set of masks and one set of wafers can build dozens of different products. By contrast, discrete manufacturing starts with a huge number of components but you end up with only one product.
All fabless companies need supply chain management software, which has the structure to trace product from being in wafer form to being in die form, to package die form, to being in finish tested form. The manufacturing modules in an ERP system simply can’t do that. You have to have something specially designed for this industry.
Additionally, the semiconductor manufacturer typically has a very specific set of design software tools that no other industry uses. And because there are often yield problems, yield analysis software is also required that is customized for the inverted bill-of-materials manufacturing process. Typically yield management software will come from one set of vendors, design software from another.
Then there’s usually a completely different class of software vendors that take care of all your financials, manufacturing management/supply chain management-type stuff. That’s where Tensoft FSM comes in.
So that’s a basic summary of the types of business systems that fabless companies require.
EDITOR: To see how Tensoft FSM (predecessor to Tensoft SemiOps) helps streamline operations at fabless semiconductor customer, visit this page. For more information about Tensoft’s products and services, please contact us. If you’d like to comment on this article, I encourage you to Tweet, post to Facebook or blog about it!