Even though it seems like everything has a computer chip these days, the semiconductor industry was not immune to the destruction of COVID-19. As millions of people geared up to work from home, a global chip shortage emerged.
Rapid fluctuations in the automotive market exacerbated this. Because so many people were staying home, carmakers canceled many of their orders. But several months into the lockdown, road-tripping rose in popularity as people felt the need to get away. Once this trend took over, automotive chip demand was suddenly back.
Unfortunately, many semiconductor manufacturers had already switched their lines over from automotive chipsets to meet the demands of high-performance markets. As manufacturers scrambled to add capacity and expand their tool lines, the global supply chain for semiconductor manufacturing equipment and parts collapsed. This led to even more production and delivery delays.
So, how did they increase their capacity when the world felt like it was falling apart? Many turned to the secondary equipment and parts market.
To learn more about the significance of the global secondary equipment and parts market, I interviewed Bruce Kim, CEO of SurplusGLOBAL. Although the time difference between Arizona and South Korea prevented us from talking on Zoom, we communicated through an email interview.
Kim shared how semiconductor device manufacturers have become heavily dependent on global supply chains in recent years, and as we’ve seen through COVID-19, any sudden disruption in supply and demand can have major consequences. Because of this, I wanted to know which industries were most impacted and therefore, most in need of parts.
I knew the automotive industry had been heavily affected by the chip shortage and other supply chain challenges, but Kim highlighted the AI and industrial markets as well. As AI becomes more integrated in both business and consumer applications, the demand for semiconductors increases. Similarly, semiconductors are becoming more important with the development of technologies like IoT (Internet of Things), 5G, and high-performance computing (HPC).
Even though the pandemic brought the secondary equipment and used parts market to the top of the industry’s mind, procuring second-hand equipment is nothing new. Kim shared how using refurbished semiconductor parts to create new tools is still becoming increasingly prevalent, and he even cited it as a significant trend in the market. Also, with the industry’s growing focus on sustainability, reusing equipment contributes to resource recycling and reducing electronic waste.
This was one of my biggest takeaways. Even though the initial supply chain shock of the pandemic is behind us, the market is still growing. Kim listed several reasons for the continual demand for second-hand parts, including:
- Cost savings
- Faster availability
- The ability to secure rare parts
- Sustainability reasons like those listed above
- Proven technology (these tools have already been tested to be reliable)
- Access to a larger collection of tools
- Also, many used equipment providers offer refurbishment and technical services
To conclude our interview, I asked about the meaning behind SurplusGLOBAL’s inspirational slogan, “We save the world with legacy equipment and parts.”
“This slogan highlights our focus on the environmental and economic benefits of recycling equipment in the semiconductor industry,” Kim shared. “Manufacturing new equipment is resource-intensive and can create waste. By promoting recycling, SurplusGLOBAL helps reduce this environmental footprint. [We also promote] cost-effectiveness by offering essential legacy equipment and parts at reasonable prices compared to the cost of new equipment.”
Learn more about SurplusGLOBAL solutions and its Global Parts Platform.
