Rethinking supply chains: The semiconductor industry

Semiconductor chips have become a key component in the interconnected world of products and services. The world’s transition to a digital economy relies on a resilient and thriving semiconductor industry.

As the semiconductor industry has grown in size, volume, and complexity, the associated risks to business supply chains have also increased, particularly in light of recent global economic and geopolitical shocks.

Lloyd’s and WTW have collaborated to provide practical perspectives into the supply chain challenges facing the semiconductor industry, surveying and interviewing more than 100 risk professionals from across the semiconductor sector to understand its risk drivers and where insurers might fill protection gaps.

Combining these perspectives with proprietary data and reports, thought leadership and third-party analysis, Lloyd’s is publishing Loose Connections: Rethinking semiconductor supply chains through its Futureset platform to help build resilience in this critical sector.

Loose connections: Rethinking semiconductor supply chains - Key findings

• Risk managers are proactively planning with business continuity and procurement teams and suppliers and significantly increasing inventory capacity to prepare for disruption and demand.
• Around 80% (81%) of survey respondents in the semiconductor sector said a lack of insurance solutions was among the greatest challenges to addressing their risks in the next three to five years.
• Respondents also see significant scope for increased collaboration between the semiconductor sector and its insurers to fill protection gaps in an uncertain risk landscape.
• The key risk drivers of most concern to the semiconductor sector include:
  • Economic pressures
  • Supply and demand changes
  • Talent and labour
  • Raw materials and components
  • Technology
  • Packing and transport
  • Regulatory/geopolitical/political risks
  • Climate change and sustainability.
• Semiconductor companies are embracing technology to support operational efficiencies, including gaining greater visibility of exposures and digitizing supplier data.
• Enhancing supply chain data represents amongst the biggest opportunities for continued progress, with more information available than ever before to build a view on supply chain risks and opportunities to optimize.

The semiconductor report findings follow those in the Lloyd’s/WTW supply chain research, Rethinking food and drink supply chains: the food and drink industry.

Lloyd’s/WTW will be issuing a third report in the series later this year, focusing on supply chain risk in the transportation sector.

Download your free copy of Loose Connections: Rethinking semiconductor supply chains by completing the short form at the top right of this page.