The Hidden Challenge: Outdated Legacy Systems Behind Semiconductor Industry’s Downtime

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The semiconductor industry is the pillar of modern technology, playing a crucial role in various everyday electronics, and its downtime can wreak havoc. It is estimated that nearly 20% of its losses are due to downtime, especially unplanned. Several factors contribute to unplanned downtime, such as improper maintenance of machinery systems or outdated legacy systems. This will result not only in production shortages but also in monetary losses.

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One major Taiwan-based semiconductor manufacturer experienced downtime in 2018, which caused a production delay and an estimated loss of $170 million. Such incidents highlight the vulnerability of system failures in the semiconductor industry. In this blog, we delve into how outdated legacy systems result in downtime in semiconductor manufacturing causing monetary loss and affecting global supply chain.

What is Downtime and What Are Its Types in the Semiconductor Industry?

For any manufacturing industry like semiconductors, the duration when the manufacturing process or operational activities stop is known as downtime. There are two significant types of downtime:

Planned Downtime

When a manufacturing company is scheduling a halt to stop its operational activities like productions for a scheduled maintenance, manufacturing changes, or upgrades is known as planned downtime. Though this downtime still results in monetary loss, the priority is to manage the machinery maintenance and changeover of products as they remain within the budgeted timeframe.

Unplanned Downtime

Unplanned downtime is an unexpected interruption that disrupts the functioning of production and operational activities. It occurs without any prior warning and persists for an unpredictable period, which can create a halt in production and result in a loss of revenue.

Unplanned downtime often results from hardware failure. This may be due to a lack of maintenance or the continuous use of outdated legacy systems. Due to unplanned downtime, semiconductor manufacturers lose revenue for every minute the machine is not producing.

Real-World Downtime Examples in Semiconductor Industry

Here are some real-world examples of semiconductor manufacturers who faced downtime, resulting in revenue loss.

• Toshiba and Western Digital: In July 2019, Toshiba and WD plants in Japan experienced a 13-minute power outage. This affected their manufacturing facilities, halting the production of their NAND flash memory and impacting their global supply.
• Renesas Electronics Chip Factory: Renesas Electronics is a renowned semiconductor manufacturer known for its automobile chips. Toyota, Honda, and Nissan are some of its well-known clients. Due to a fire incident in one of the company’s cleaning rooms in Naka City, Japan, they had to halt production, affecting the global chip supply.
• Samsung Electronics: In 2020, Samsung Electronics faced unplanned downtime in its Hwaseong factory due to a one-minute power outage, which took around three days to recover. Also, in 2018, the Pyeongtaek factory faced a 30-minute blackout, resulting in a loss of 50 billion won ($43.3 million).

How to Calculate Downtime True Cost in the Semiconductor Manufacturing Industry?

The impact of downtime on employees and productivity can calculate the true cost of downtime in the semiconductor manufacturing industry. For employee downtime, calculations of wages and overtime are included, while for productivity calculations, orders lost that have affected sales and the loss of any client are considered. By combining these factors, semiconductor manufacturers can easily calculate the estimated fiscal figure due to unexpected interruptions.

There is a direct correlation between the cost related to employees impacted by the downtime and the decline in production.

• For the actual loss calculation, determine how many hours per day production has taken place compared to the average number of units produced with the hours of unplanned downtime.
• Now, divide the average units produced without any interruption during the day.

How Do Outdated Legacy Systems Result in Downtime in the Semiconductor Industry?

Outdated legacy systems are the aging hardware that requires regular maintenance, while their manufacturers no longer support some of the vintage hardware. Here are some severe challenges due to downtime:

Cybersecurity Risks and Vulnerabilities

Outdated legacy systems are not updated and lack modern security measures, making them vulnerable to various security vulnerabilities, which can result in system failures and production halts.

Incompatibility Issues

Aging legacy hardware are incompatible with the latest technologies and create bottlenecks in production processes. Many semiconductor manufacturing industries are adopting smart manufacturing or Industry 4.0, which means integrating AI, data analytics, and IoT in their production for seamless operations and enhanced productivity. This limitation of aging hardware becomes more apparent, affecting overall operational efficiency.

Lack of Support

One of the significant challenges of aging hardware is the lack of assistance and support from their manufacturers (OEMs). As the hardware and systems age, obtaining replacement parts becomes increasingly difficult. Also, with the rise in modern technology, getting skilled experts to work on legacy hardware is becoming tough, which also contributes to downtime.

Challenges Regarding Maintenance

Maintaining aging legacy hardware can be extremely challenging and expensive. Also, with a lack of vendor and manufacturer support, managing that hardware becomes increasingly difficult in case of wear and tear, resulting in unplanned downtime.

Regulatory Non-Compliance

Older legacy systems struggle to meet the latest industry regulations and standards. They are also vulnerable and more prone to data leaks and breaches, which can result in fines and legal penalties.

These issues often result in frequent system crashes, slow processing speeds, and compatibility issues with modern technologies, leading to unplanned downtime and revenue loss. Thus, reliance on outdated legacy systems ultimately compromises productivity and efficiency and inflates costs.

Minimize Downtime in the Semiconductor Industry with Stromasys

Stromasys offers emulation and virtualization solutions for aging legacy systems like DEC Alpha, SPARC Solaris, VAX VMS, PDP, and Pa-Risc. For more than 20 years, Stromasys has offered its services in 70+ countries. The Stromasys Charon solution imitates the functions of the original systems on a new modern system like x86 servers or a cloud platform, allowing businesses to run all their existing mission-critical applications seamlessly.

Benefits of Partnering with Stromasys

By partnering with Stromasys, semiconductor manufacturers will get the following benefits:

• Reduced Downtime: By eliminating legacy systems with Stromasys, these semiconductor manufacturers will seamlessly carry out their operational activities without any hiccups, such as maintaining aging hardware, wearing out manufacturing parts, or looking for their replacement as they will now seamless operated on a platform which is more secure, scalable, and flexible.
• Cost-Effective: By migrating legacy systems to modern platforms, manufacturers can significantly minimize their aging hardware’s additional maintenance and operational costs.

• Robust Security: The new platforms are equipped with advanced security measures to prevent cyber risks and vulnerabilities. This helps them comply with industry regulations and policies, thus preventing legal violations and penalties.
• Seamless Integration: Migration of legacy systems on a modern platform will enable manufacturing industries, especially semiconductor manufacturers, to integrate modern technologies like smart manufacturing, which uses AI in its infrastructure to enhance productivity, reduce errors, and minimize additional maintenance costs. It will not only significantly improve operational proficiency but also reduce downtime.

If you are also looking to integrate these modern technologies in your business and your outdated legacy systems are hindering your progress, then you are at the right spot. Just contact our seasoned legacy experts, who will assist you with all your queries and questions in a minimal amount of time.

Conclusion

The outdated legacy systems are a hidden challenge for the semiconductor industry, where every second of production counts and downtime can result in significant monetary loss. The downtime in the business not only halts production, resulting in millions of losses, but also dents the business’s reputation. Rather than relying on the aging legacy hardware, it is suggested to migrate to a modern platform to minimize downtime, reduce additional costs, and enhance overall operational efficiency to ensure continued growth.

Frequently Asked Questions (FAQs)

1. What are the financial impacts of downtime caused by outdated legacy systems?

Financial impacts include lost production, increased maintenance costs, potential customer loss, and expenses related to rush orders or overtime to make up for lost time.

2. How is planned downtime different from unplanned downtime?

When a manufacturing company halts its production, it is known as planned downtime due to instances like maintenance of equipment. At the same time, unplanned downtime is an unexpected event that occurs due to any system failure or interruption in productivity due to factors like power outage.

3. What are the benefits of planned downtime?

The benefits of planned downtime are:

• Extends the life span of equipment.
• Avoids unplanned downtime as the systems are regularly maintained.
• Maintain the security infrastructure to prevent any security breaches and attacks.

4. What are the outdated legacy system challenges faced by semiconductor manufacturers?

Due to outdated legacy systems, semiconductor manufacturers face challenges such as costly hardware maintenance, security issues, and a lack of support from vendors and original equipment manufacturers (OEMs), making it difficult to update and troubleshoot them.

5. What is smart manufacturing/Industry 4.0, and what is its significance for the semiconductor industry?

Smart manufacturing, also known as Industry 4.0, is a modern technology that integrates artificial intelligence (AI), the Internet of Things (IoT), and data analytics into the manufacturing process to enhance operational efficiency. By integrating it into the semiconductor industry, it can help reduce downtime and enhance overall performance

6. What are the cybersecurity vulnerabilities and risks associated with outdated legacy systems in semiconductor manufacturing?

The outdated legacy systems are not regularly updated, have unpatched vulnerabilities, and lack modern security measures, which makes them more prone to cyberattacks, which can result in potential data leaks or production disruptions.

7. How do outdated legacy systems affect data governance and compliance in the semiconductor industry?

Aging hardware can compromise regulatory compliance and data governance efforts. They often use outdated methodologies and lack modern data storage and management technologies, making meeting compliance standards like PCI DSS, SOX, and HIPAA difficult.