Pioneering e-supply chain integration in semiconductor industry: a case study

Abstract

Taiwan Semiconductor Manufacturing Company (TSMC) is the largest semiconductor foundry in the world. Advanced Semiconductor Engineering Inc. (ASE) is the world’s leader in semiconductor assembly and testing. From 1998 to 2004, the two companies completed electronic integration of 11 key business processes through the Internet. The result is a seamless interface between TSMC, ASE and their joint customers. They can now obtain accurate, timely information on their product status and respond appropriately when needed. While the direct economic benefits are estimated to be around US$ 10 million through productivity increase over a total investment of about US$ 2 million, the indirect benefits of this initiative could be on the order of US $100 million if the joint customers’ benefits are considered. In collaboration with the RosettaNet organization, TSMC and ASE leveraged their pioneering experiences to define three data exchange standards which can then be widely adopted in the semiconductor industry. This case study is a demonstration of how two leading companies in their respective fields can join forces to make a difference in creating value for the entire semiconductor industry, which in turn benefits society at large. With the momentum continuing to build and the sphere of influence continuing to expand, it is anticipated that TSMC, ASE and the entire sector will upgrade their competitiveness in terms of cost, quality, responsiveness and customer orientation.