For many semiconductor manufacturers and suppliers, the business need for automation is reaching a tipping point. Ongoing labor shortages, compounded by sustained demand for consumer electronics and pandemic-related market forces, make it increasingly difficult to meet and order fulfillment expectations.

According to McKinsey, “semiconductor segments will experience negative year-on-year revenue growth in 2020. Looking ahead to 2021, however, we expect that the situation will improve as most end markets recover, mostly because the starting point for 2020 will be much lower than it was in previous years.”

In order to stay competitive in a struggling industry, companies need to look for ways to pivot and stay competitive. Semiconductor manufacturers and suppliers are among the groups that have the most to gain from increased warehouse automation.

Automated material handling in the form of storage, transport, and sorting solutions reduces manual processes, and the environmental disruptions and safety issues they cause.

According to Teknowlogi, 48% of surveyed warehouses said the biggest barrier to greater automation and robotics usage is cost. However, investment in automation yields significant returns and advantages, as it can:

  • Increase warehouse capacity. Making the best of available space is critical to operating efficiently, especially for fabrication plants with a small warehouse footprint. Material Handling & Logistics magazine also reports that, “By maximizing the use of underutilized overhead space from the floor to ceiling, today’s dynamic storage and retrieval systems can reduce traditional floor space requirements by 65-85%.” AS/RS solutions achieve space savings by storing SKUs higher and denser. The automated nature of retrieval also eliminates the need for human intervention in the storage area, allowing the storage aisles and overall footprint to be as compact as possible.

  • Expand warehouse operations. According to McKinsey, companies in the market for semiconductors noted customer service and on-time delivery as top influential factors when making the decision to buy.4 As such, customer responsiveness is crucial for maintaining a competitive edge and long-term partnerships. By implementing automated solutions, semiconductor manufacturers and suppliers can automate material handling, storage and picking processes outside the clean room to extend operations around the clock, maximize productivity, and reduce labor costs.

  • Decrease operational costs. Going into 2021, the World Semiconductor Trade Statistics (WSTS) forecasts global semiconductor sales will rebound from the effects of COVID-19 and bring in $452 billion. In these unprecedented times, taking advantage of the growing market while maintaining management operating costs is essential to turning a profit. Additionally, semiconductor manufacturers and suppliers should preserve profitability by cutting costs, not compromising on product quality. By upgrading manual warehouse tasks with automation, semiconductor manufacturers can realize up to 65% decrease in operational costs by decreasing labor, streamlining processes, integrating systems, and reducing loss to product scrap associated with material handling.

  • Adapt to industry demand. End uses for semiconductors and their suppliers include a variety of categories ranging from consumer electronics to industrial and automotive.6 In fact, customer short delivery and lead time demands are leading motivations for adopting automation in manufacturing warehouses today.

  • Enhance worker productivity. A key benefit of material handling automation is its ability to support manufacturing and enhance productivity. It frees workers from inefficient tasks that slow down production, especially manual retrieval and delivery of parts to the clean room, and enables them to handle strategic business objectives and carry on value-added operations. Automation also eliminates opportunities for human error, which reduces safety incidents and prevents material loss. Since the automated material handling system is going to be used outside the clean room environment, alongside pre-existing equipment, ease of integration can make a dramatic impact on the upgrade and installation process when minimizing is essential to keep operations running. An experienced intralogistics automation provider can accommodate the need to balance automation costs and productivity, ensuring minimum downtime and maximum investment value.

Interested in learning more about warehouse automation and its benefits and applications for semiconductor manufacturing and supply? Explore Murata Machinery’s automated material handling solutions:

Storage: Automated storage and retrieval systems (AS/RS)

Transport: Automated guided vehicles (AGVs) and other solutions for warehouse environments as well as clean room transport

Sorting and picking: Goods-to-person case and tote picking and other modified solutions

For guidance on selecting the equipment that can drive the most value for your business, contact Murata Machinery USA. We can answer your technical questions and connect you with an expert that understands the complexities of your decisions.

This article was written by Nils Hart, Director of Business Development at Murata Machinery USA, Inc., makers of fully customizable automated warehouse solutions that help today’s semiconductor manufacturers and suppliers stay competitive.