DSC Semicon Sales Deck v1 - 8mar2011

DHL Supply Chain
Semi-Conductor Presentation Deck

DHL Supply Chain, Asia Pacific
Working Draft only

Mar 2011
Agenda
Semi-conductor Industry Facts & Trends
Changing Supply Chain Requirements
DHL Semi-Conductor Sector Strategy
DHL Capabilities & Solution Sets
Case Studies
Semi-Conductor Presentation Deck DHL Proprietary and Confidential 2

Semi-conductor Industry Facts & Trends Working slide
Market description Implications for Strategy Development

Definition
• The semiconductor market consists primarily in the manufacture and • As supplier for other industry sectors, the
sale of semiconductors and related products growth of these end user industries is
• Potential sub-sectors include Semiconductor Equipment Manufacturing
critical to determine growth scenarios for
(e.g. wafer fabrication equipment, test equipment)
semiconductors
Key products
• Products range from highly specialized to near commodities
• Memory, microcomponents, logic and analog IC, discrete, • Different roles are critical to be observed:
Optoelectronics, ASIC, ASSP, Sensors • Semiconductor manufacturer
• 3rd Party manufacturing
Suppliers • Manufacturer of capital equipment
• Providers of capital equipment essential in semiconductor • Distributors as key customer and/or
manufacturing (e.g. Tokyo Electron, KLA-Tenecor) potential competitor
• Excludes raw / natural materials (e.g. Silica) suppliers
Customers
• Makers of electronic products – computer and network hardware,
• Supply Chain requirement
defense systems, industrial controls, vehicles and consumer electronics • Multiuser Warehouse
(e.g. LCD TV’s, mobile devices) • Control tower
• Capital Equipment competency
Roles centre
• Integrated Device Manufacturers – Design, manufacture and sell their • Consolidated distribution
chips (e.g. Intel, Samsung) • Multi customer collaboration
• Fabless Manufactures – Design and sell chips, but outsource
manufacturing to foundry companies (e.g. Qualcomm, NVIDIA)
• Foundries – Provide contract manufacturing (e.g. TSMC, UMC) • What is the future industry development
• Distributors – 4 main players (Future, Avnet, EBV and Arrow)
that will impact the strategy?
• Equipment companies – provide manufacturing / testing equipment
Source: Datamonitor, Gartner, Citigroup
Market Trends Supply Chain trends
Product / Innovation
• Capital intensive, with sophisticated and expensive R&D SC optimization needs
• R&D / innovation allows competition to differentiate their product • Increasing cost pressure from end
• High barriers to entry - requires significant R&D with state of art consumer (consumer electronics,
devices and highly skilled workforce automotive, PCs etc) will enforce cost
• Highly competitive - characterized by rapid tech. changes
optimization needs for the SC – change
Customers, Sales & Distribution Channels of Inco terms, collaboration etc.
• As demand for PC’s, handsets, automobiles, and other
consumer electronics improve so should demand for semicon Market consolidation
• As the semiconductor companies removed the inventories from • The predicted decline in demand during
Europe and US more reliance will be place on distributors H2 2010 and 2011 will accelerate further
• High-value secure supply chains consolidation and collaboration of
players, which implies a consolidation of
Consolidation and Competition
• Rise in joint ventures / mergers and acquisition (e.g. announced SCs and logistics providers
merger of NEC and Renesas, ON Semi and Sanyo Semi, Intel
and Infineon wireless) Consolidation of production
• Several Semi conductor companies moving to IPO • Although majority of production will stay
in AP, there is a move to 3 rd party
Pricing manufacturing (TSMC) Asia/China
• Over-capacity in H2 2010/2011 production will drive prices
downwards. High value goods
Production • The high value of the shipments require
• Primarily production sites in AP (esp. Japan with 36% of global specific handling in distribution
existing capacity); general overcapacity in the market, but • Fiscal implications (e.g. import taxes /
strong announced investment plans in Taiwan VAT) are becoming increasingly
Source: Datamonitor, Gartner
important
Market size and key players Market growth
Market size Market growth (USD, billion) #% CAGR

• USD 260 bn in revenue for 2008 for Semiconductors.
Driven by Technology & Auto crash
• A sharp decline of -12% for 2009 resulting in USD 230bn
• Good recover in 2010 approaching 2008 levels 7.4%
7.9%
-12%
Top 5 companies have 35% of the total market 255 230 287
178
(2009), down from 36% in 2008
14%
2003 2008 2009 2013
#1 - Intel
8%
#2 - Samsung Growth trends (observations)
5% #3 - TI • Sharp decline in market size in 2009 (-12%)
4% #4 - Toshiba
#5 - ST Micro • Overall increase in demand through H1 2010
65% 4%
#6 - All Others
• As prices of final goods have fallen (e.g. PC’s, LCD’s)
the cost restrictions have been pushed down the
Other key players supply chain to semiconductor companies,
• IDM’s – Cypress, IBM, LSI Corp, Fujitsu
• Fabless – Qualcomm, NVIDIA • Global stimulus packages have reduced substantially
• Foundries – TSMC, UMC, Chartered, Vanguard
• Equipment Manufacture – Tokyo Electron, Applied • Forecasted growth is not stable
Materials, ASML Holdings, KLA-Tencor
• Distributors – Arrow, EBV,Avnet, Future
Source: Datamonitor, Gartner, Citigroup

Semiconductor Application Revenue and Growth
Military / Civil Aerospace

Electronics
• In 2009, an accelerated decline in total revenue of
1,2% Automotive about 12% was realized, smaller than forecasted
Industrial Electronics
Electronics
(after 5.4% decline in 2008)
8,7% 7,8%
Communication • Automotive and Communications Electronics have
Electronics a higher percentage in your companies business
26,7%
• Automotive and Communication Electronics are
37,6% growing substantially in China and India
18,1%
Data Processing
Electronics
Consumer
Electronics
-17% 10,3% 12,1% 8,1% 1,3%
Source: Gartner

 Move to new larger more complex Fabs and outsourced capacity to foundries
 Major outsourcing for A&T mainly Asia based
 Growth by industry sector is linear
 Only a small amount of consolidation has happened so far
 No new players have come into the market
 Customers are focusing much more on the cost of their supply chain
 Structural changes required to deliver cost savings in supply chain
 Airfreight Capacity
 Mode selection
 Collaboration
 Landed Cost

Clustering – Components (VMI for PCs & Handphones, Semicon
A&T) Working slide
PC Manufacture:
•Gateway – Shanghai, Shenzhen
•Dell – Penang
•Acer - Shanghai
•Apple – Shangahi, Shenzhen
•HP – Bangalore
•Lenovo – Shenzhen, Pondicherry, Baddi
Shanghai
Handset Manufacture:
Shenzhen •Sony Ericsson – Hong kong
Taiwan •Motorola – Tian Jin, Hang Zhou
•Nokia – Chennai, Beijing, Dongguan
Manila
Penang
Singapore
Contract Manufacturing Cluster (PCs, Devices, Handsets)
Semicon Assembly & Test

Both

Semicon – Manufacturing Base (FABS) and A&T Sites Working slide
Auto
Auto
Fabs
A&T Fabs
Fabs A&T
A&T DC
DC Telecom
Telecom
Outsourced
Distributors
Distributors
Combined DC and Customer Locations Working slide
Legends
Distribution Centre
Auto Customers
Telecom Customers
Agenda
Case Studies

Changing Supply Chain Requirements Working slide
Fab to Assembly and

Stage Inbound to Fab Distribution Return
test
Customer
Raw Materials Supplier OEM OEM
Player Contract Fabricator OEM Distributor Repair
Assembly Cross Docking

Foundries And Test Global DC Hubs End Customer Mission Critical
Supply Raw materials Asia Spare Parts
Chain
Flow Regional Stocking
VMI
Capital Equipment
Spare Parts
Basic / • Raw materials to • Manufacturing of products • Order and Fulfillment • Demand in industry for
fabrication/foundry primarily SE Asia/China • Direct to customer programs mission critical capital
Advanced
• OF raw materials • Only fabricating is being • AF cross dock or Express Break equipment parts and
SC activities • AF or parcel movement of outsourced Bulk support
wafers • AF or Express to global • Reduced requirements for
• AF for capital equipment DC’s regional stocking
and parts • Greater percentage moving to
Distributors

Key differentiating factors of Supply Chain* Key Players and Impact in Supply Chain
• There is a significant quantity of raw material OEM

movements into primary fabrication which feature • Key driver in semiconductor supply chains due to
chemical movements; these tend to be handled by manufacturing and control of product movement and volume
specialized companies or vis supplier controlled sales
freight movements • Increase use of 3rd Party manufacturing
• Significant capital equipment requirements with a
frequent cycle of CE worldwide. Management of Distributor
CE features high reliability, tracking visibility and • Distributor services to varied end user customers, bundled
end to end management typically via control
product provision
towers
• Arrow, Future-Active
• Multiple and distinct manufacturing processes,
fabrication, assembly and test. Increase in
outsourcing Contract Fabricator
• Increase demand for direct to customer solutions • Provide basic wafer production to chip manufacturers
to support JIT and VMI manufacturing in • Global Foundries, TSMC, American Semiconductor
Automotive and Hi Tech
• Greater willingness for industry collaboration and • Raw material Supplier
consolidation because of complimentary products, • Base material suppliers at front end of supply chain, many
i.e. memory, resistors, power control to mutual chemicals and parts provision
customers • Air Products
• Key necessities are for high security, risk
mitigation and flexibility
• Essentially no aftermarket (exception Capital Capital Equipment Manufacturer
Equipment Manufactures, e.g. KLA Tencor, Tokyo
• Provision of complex sensitive production equipment
Electron, Applied Materials) • Tokyo Electron, Applied Materials, ASML Holdings, KLA-
Tencor
* compared to other subsectors

Distributors – Key players and key offering Implications for Strategy
• There are 4 main Distributors servicing the Electronic The distributors act as a Inventory Owner and
components sector: Future, EBV, Avnet and Arrow. have very extensive relationships with the
OEM’s.
They provide a wide range of services and

• EBV is a dedicated semiconductor distributor, which is provide a the Technical Solutions Support that
part of the Avnet group. allow the Semiconductor companies to expand
• The service they provide to the semiconductor into new markets.
companies are vital in the following areas.
• Material Management Programs As the semiconductor pull their stock holding

• Bonded inventory from Europe and the US, they will be more
• EC-based auto replenishment reliant on the distributors.
• Supply chain management
• Internet-based supply chain solutions
• MRP schedule sharing Need to work closer with the Distributors and
• JIT services leverage our current relationship through the
• EDI or consolidated billing MNC group.
• Product Marketing capability
• Technical Solutions Support
• Professional selling procedures 10 to 15% of the semiconductor volume is
shipped through distributors. Percentage vary
dramatically from customer to customer

Supply Chain trends and key Challenges Overall characteristics
• Consolidation
Overall How typical / important are characteristics
• Closure of Old Technology Plants with
for subsector supply chain
continued movement to AP
• Increased focus on New Technologies low high
• Increased Capital Equipment moves Flexibility

I2F • Pure-Play foundries to gain market share
over IDM foundries Visibility/Control
• Fabs are still located in EMEA and US, but Speed to market
Fab to A & T high percentage of A&T is in Asia.
• All New A&T are being placed in Asia.
• Wafer’s are moved globally to Asia. Outsourcing
Reliability
• Direct to the customer or via cross docks
Distribution rather that regional DC
Costs
• Increased use of distributors
• Higher percentage of chips used in Asia Trends
• Limited to Capital Equipment Manufacturer

Aftermarket primarily
• Small utilization of Faulty Part Hubs –
screen and test facilities
Source: Team

Requirements / expectations on logistic providers
1 Global visibility of end to end supply

chain
high
5
2 Reliability and speed of supply chain 2
1
3 Flexibility 9 4
10
4 Single point of contact 7
Critical 8
5 Global account management for
Industry 6 3
6 Security – Transport and Warehouse
7 Simplified rate structures
8 Global invoicing
low
9 Capital Equipment – Zero defect – low high
proactive communication Relevant for DHL*
10 Cost Optimization * Strategic (e.g. business partnership, new growth

opportunities etc.) or Tactical (e.g. revenue potential,
business retention)

Typical Semiconductor Supply Chain
Two specific strategies consistently appear
Working slide
Buffer inventory Only

Commodity manufacturers
Consignment
Bulk storage For Emergency Orders
Hub/VMI
Power / D-Ram / Flash Products
Cross
Global DC’s
Dock
Wafer Fabrication
Assembly & Test

Suppliers
Customers
End
Bulk storage
Asia
DC
EMEA
Customers
DC
End
Customer Specific manufacturers Americas
MOS/MPU/MCU/DSP Products DC
I I
M M
Freight P Freight P Freight Order
L L
Forwarding A Forwarding A Forwarding Fulfilment Distribution I2M / VMI
Capital / Parts N Wafers / Die N Finished Goods X-Dock & Inventory Storage
T T
Supply Chain Visibility, Event Management and Optimisation

Manufacturing Support Centre Strategy
Strategically Located Hubs serving multiple customers in country
(Dependant on service commitments)
Working slide
Megajit
Consignment
Bulk storage Hub/VMI
Customers
China
Cross
Global DC’s MSC
Dock
Assembly & Test
Buffer inventory Only

For Emergency Orders
Customers
Hungary
Bulk storage MSC
Asia
DC
EMEA
DC
Customers
MSC
Mexico
Americas
DC Consignment
Hub/VMI
Megajit

Agenda
Case Studies

DHL Semi-Conductor Sector Strategy Working slide
Technology Strategy
160
• Understand overall Industry and market trends and key success factors for our key customers
Identified
• Define comprehensive Technology Strategy based on more specific sub sector strategies Customers
• Establish Technology Sector Solution Portfolio / Integrated DHL Services / Solutions
Storage & Semicon &

Mobile PC & Consumer Imaging & EMS, ODM,
Market & Networking Enterprise Components
A Devices Notebooks Electronics Printing CM
Trends Computing
Customer SC
and B
Requirements
34
DHL business 21 22 8 25 18 21 11
and C Avago
Ericsson, NXP
capabilities Nokia
Nokia HP Samsung Kyocera
Hitachi
On-Semi
Motorola Dell Philips, HP
Siemens Epson Texas Flextronics
Vodafone Lenovo Sony Fujitsu
CommScop Kodak Instruments Jabil
Strategic Sony
e Huawei Apple LG Dell
/Ericsson Xerox Infineon FoxConn
Initiatives & D Acer Panasonic SUN
Alcatel- Canon IR Wistron
Telefonica Garmin NCR
Business Plan HTC
Lucent Lexmark
Seagate
Vishay Elcoteq
Juniper

DHL Semi-Conductor Sector Strategy Working slide
Strategic focus and proposed initiatives
Best in class Distribution SC will require different solutions

Best in class end to end • Consolidated Supply Chain (FCS / DGF Model)
Develop distribution model is key • BBX and BBX economy
“Best in Class” differentiator and basis to • Simplified rate structure
Distribution SC further grow semiconductor • Global x-BU invoicing
business • AP Multi User Warehouse
• NFO process via Sameday
Expansion of Semicon Revenue opportunities on TOP 25 semiconductor companies

focus and solution offering should be pursued by
Leverage • Tactical Sales Focus on semicon GCS customers
Industry expertise to less penetrated
customers will generate • Provide Industry expertise to non semicon GCS customers
to capture revenue • Build GCS/MNC Semiconductor community to share
opportunity additional revenues
Industry knowledge / BDPs, to open solutions for non GCS
customers and to review Distributor Strategy
Higher penetration in the Capital Equipment move Business

Movement of capital will require
Penetrate Capital equipment set high • Highly reliable transportation and special handling solution
equipment move requirements on logistic • Competence Center to build expertise and to provide
business providers and represents professional assistance
an attractive business

Agenda
Case Studies

DHL Capabilities & Solution Sets Working slide
Initiatives DHL Potential
DGF • Consolidated AF with multi clearance • Growth in Cross-dock capabilities.

1
Consolidated Dist • Shared user road network Multi customer final mile delivery to
• MIT and consolidation for distributors Distributors, EMS and Auto tier 1’s
• Multi shipment clearance • Growth in Cross-dock capabilities.
BBX and BBX E
2 • Rapid transit time with box level tracking Multi customer final mile delivery to
• Final mile consolidated distribution Distributors, EMS and Auto tier 1’s
• Semiconductor Industry DTD Express rate • Allows RCM to sell business without
3
Simplified rate RFQ. Faster payment time, few
for BBX solution in single currency
structure rejected invoices thus lower AR
• EDI invoiced in single currency
cost. Reduced cost of sale
• One invoice per shipments • Increased revenue through new
4 Global XBU Invoicing • Lead BU to control all invoicing business gains. Customer are
demanding one invoice
• Muti customer WH in 4 Asia clusters. • Increased revenue through new

5 Asia Multi User WHS • Flexible labour business gains. Customer are
• Segregated warehouse with multi systems looking for flexibility
• Start to target current DHL customer • Additional outsource spend of

6 Top 25 Customer • Plan to engage with top 25 customers €768m for Top 25.
• Use current knowledge to assist on bids • Additional outsourced spend of
€401m for GCS customers
• Global capital equipment centre of Over 11% of the semiconductor logistics
7 Capital equipment excellence
spend is Capital equipment
Larger margin for DGF
• Single point of ownership for all moves Circa €300 million spend
Source: …

Global XBU Invoicing

Solution Profile
Description Products & Capabilities needed Solution characteristic

Consolidation of multiple BU invoices into a An electronic means to combine the different Optimization and consolidation of multiple BU
Single Invoice to be issued to the Customer. Charges associated with multiple BU touch Charges.
Points. The system will need to combine these Consolidation of Customs and Tax related
Charge and enable a single print or electronic Charges.
Transfer of these charges to the customer or
End user.
Customer benefit
The customer will receive one single invoice
Relevant supply chain stage
Billing
Encompassing all charges associated with
Their shipment whether it touches more than Relevant geography
One BU or not. Global
Business Potential Development / Implementation challenges
Addressable market Key challenges

Enhanced customer satisfaction from the point of ease of doing Collaboration between the BU’s to create such a system.
Business. The end result should also be enhanced billing solutions The costs that could be incurred in trying to develop the system.
with increased billing accuracy.
Customer opportunities Business risks

All companies could benefit from this solution. • Continued error rates and customer frustrations will continue
to grow as long as we can not provide a single invoice to the
customer.
• Secondary risk factor will be if we create a solution that is not
100% accurate – it will create further frustrations.

Multi-User Asia Warehouses

Solution Profile

Strategically located shared semicon user Security of product and intellectual property Safe, secure and expert warehousing services
facility(s) designed to provide basic consolidation, between co-located customers Simple charging structure
cross-dock and simple value added services Platform interface capable of communicating with WMS provision
(bundling, packaging, labeling) in a shared vs. varied customer, supplier and DHL systems Full range of warehouse and VA services
segregated area of the location in Asia Standardized, common WMS product
Standard and customized warehousing
Customer benefit
Cost benefits for shared resource and cost base. Ability to use customers ERP systems
TAPA security
Relevant supply chain stage
Flexibility by combining fixed and variable pricing A/T site to FG customer
for storage and handling Basic VA services
Strategic locations facilitating connection to a Packaging services
range of transportation services
Cross-dock facility Relevant geography
Flexible warehouse space Asia Pacific, near customer production areas.
Warehousing competence specifically in semicon
Flexible labour
sector.

Small to medium sized semiconductor manufacturers approx €4bn or less, Initial set up costs – IT and location oriented
e.g. Numonyx, NXP, ON Semicondutor etc. Consolidation of warehousing to Attracting critical mass
Singapore, HK/China, Taiwan, Japan and/or Korea to create a Choice of strategic location and potential local constraints
semiconductor mega-hub Overcoming competitive concerns from customer base
Total space required in current portfolio approx 700,000 square feet – this Standardization of processes in general (Links in with DSC strategy)
could be consolidated into a smaller but significant service area Security and insurance
Reduction in warehousing costs and increasing flexibility in the supply chain Variable versus fixed cost pricing structure – how to protect against
Minimisation of global transportation due to strategic location(s) costs
Minimisation of transportation costs through bundled consol to destinations Standardized pricing across customers
Increased focus on core competency Semicon cycle
IT continuity

Top 25 Semiconductor Customer

Solution Profile

• The Semiconductor team have currently • Current and new proposed solutions for • Same solution set’s as Subsector
over 50% of the current customer base Semiconductor sector.
supply chain. • GCS Customer manager working along
• To grow the business we need to start side Subsector RCM to secure new
focusing on other potential customer business from Samsung, Toshiba etc.
within or outwit GCS. • Revenue recognition for Subsector
Customer benefit RCM for securing business outwit their
• The solution that are being developed Relevant supply chain stage
sector •
for the subsector customer are easily All Stages.
transferable to other semi customers Relevant geography
• Subsector customer expertise can be
shared with non subsector customers. • Global.

• Developing and ETE solution that is suitable for all
• The Top 25 customer excluding the subsector customers semiconductor customers.
have circa €1,240 million of outsourced logistics spend • Focusing on additional customer may require new headcount
• The other semiconductor customer within GCS have an • Multi BU and Multi GCS agreements
outsourced spend of €343 million • Focus on conglomerate semi sector may loss some
Customer opportunities consumable revenue
• Top 25
• Other GCS – Samsung, Toshiba, Sony, and Panasonic. Business risks
• Should focus on Samsung and Toshiba initially with spend of • ?.
€200 million

Capital Equipment Centre of Excellence

Solution Profile
Replicate US expertise in specialized •Will need to be led by DGF •Control Tower contacts
handling Highly Sensitive, Temperature •A centrally located dedicated team •Innovative Solutions
Controlled Capital Equipment for Texas experienced in specialty transport •Flexibility
Instruments and Intel globally. •Comprehensive SOP •Subject Matter Experts
Expertise in handling includes total door to •Develop a small cadre of trucking Sub-cons •Project Management
door coordination of Capital Equipment that have specialized equipment:
Purchase orders supporting Semicon •High Cube
Factory production •Temperature Control Relevant supply chain stage
•Air Pallet System •Aftermarket
Customer benefit •Double Teams
A core team of subject matter experts who
•Developed and close relationship with Cargo Relevant geography
provides zero-defect end to end multi-modal •Global
Airlines allowing special handling and
transportation .
Flexibility.

•Initial Setup
•Fabrication or Foundry Locations.
•Implementation
•Design Centers – Labs
•Sharing of Subject Matter Experts knowledge across the region
•Assembly and Test Sites.
•Investments in SME

•All Semiconductor companies running Fab sites with focus on Top 25. • After implementation customers stay with their incumbent
•Texas Instrument Europe and Asia provider.
•Intel Europe and Asia • Assignment of the core team.
•Freescale All Regions
•On Semiconductor
•All Equipment Manufacturer

Overview of Industry in Asia Working slide
 DHL work with most of the top organisations in the semiconductor industry.
 DHL’s extensive industry experience allows us form a comprehensive overview of the semiconductor
supply chain.
 In addition DHL are in a unique position allowing us observe the future trends and develop supply
chains to meet these needs.

Proposed Operation Flow Working slide
1 Origin 2 Receipt 3 Store 4 Despatch 5 Deliver

Dock To Stock 1 Day Pick & Ship 1 Day Transportation Lead-time 1 -3 Days
Urgent Cross-dock Process

Tianjin 35%
(If Required)
Bonded Facility
Korea 20%
France
DHL
Warehouse
Taiwan 20%
Environmental
Control
WMS System Malaysia 25%

- FIFO
- Cycle Count
Japan - Reporting
- Serial No
(If required)
1. Product (wafers) shipped from France and Japan Fabs

4. Upon receipt of order from Freescale via email/fax/EDI product is
2. Product shipped in “outers” containing multiple cassettes prepared and shipped to specified destination.
Product received against packing list.
Discrepancies highlight to Freescale 5. Proof Of Delivery to customer /Transfer to carrier recorder and made
available to Freescale.
• Product stored in line with required specifications.
(Handling At Inner Level Maybe Required To Optimise Storage Space)

Semiconductor Supply Chain Working slide
Solution Customers
Warehousing
• Global warehouse network

• Shared support/multi user environments
• Inventory management
• Secure high value storage
• Full portfolio of VAS (Packaging/Samples)
• Customised label solutions
Distribution
• Consolidated inbound transportation (domestic/port to plant)
• Full portfolio of DHL distribution solutions ( DE/DGF/DSC)
• Secure high value goods solutions
Value Added
Increased
Increased Shipping Broad Network
Inventory Accuracy & POD Of Flexible
Integrity Mgt Facilities
Decreased Less late Payment/ Decreased

Lost Sales Less Claims Consignment
Stock

Semiconductor Labelling & Packaging Working slide
 DHL provide labelling solutions as required in an ESD environment.

 Lot splitting & Sample packaging available
 Full labelling solutions, based on Bartender, readily available
 Clean-room repack capability
 Local packaging design and sourcing solutions

Semiconductor Documentation & Outbound Control Working slide
 Extensive experience across Asia Pacific on outbound quality

control in Semiconductor Industry
 Best in class KPI on outbound performance
 First Choice Quality Management Program (DHL’s Six Sigma

Program) in place driven by full
 DMAIC process improvement program.

Semiconductor – Experience, Inventory Integrity &
Security Working slide
 Over 1000 DSC personnel dedicated to semiconductor
warehousing operations across Asia Pacific

 Highly experience Semiconductor Management & Project Implementation
team
 Extensive experience across Asia Pacific on inventory management
processes in Semiconductor Industry

 Best in class KPI on inventory integrity
 First Choice Quality Management Program (DHL’s Six Sigma Program)
in place driven by full DMAIC process improvement program.

 TAPA A Grade certification
 Segregated highly secure facilities
 Comprehensive insurance program

VMI?
David Ringrose: On another note in my discussions with GCS they are keen to support the
promotion of a multi user product for semicon manufacturers
Key elements would be
-Commercial model. Fixed charge for volume range is an attractive simplistic structure for this
group.
-Shared VAS/ Packaging solutions
-Scalability
-Bond

Agenda
Case Studies

Recent Case Studies Working slide
2010  US Multinational Semi-con Customer- Implementation of DC’s in Hong Kong & Shanghai-
Hong Kong Go Live –April 2010
Taiwan Go Live- Sept 2010
2009  US Multinational Electronic Components (Incl Semiconductors)
Hong Kong Go Live- Aug 2009
2009  European Multinational Semiconductor Customer
Hong Kong Go Live – May 2009
Additional 4 Regional DC’s Implemented in 2009/2010

THANK YOU
THANK YOU FOR
YOUR ATTENTION

DSC Semicon Sales Deck v1 - 8mar2011

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DHL Supply Chain

Semi-Conductor Presentation Deck

Working Draft only

Semi-conductor Industry Facts & Trends

Changing Supply Chain Requirements

DHL Semi-Conductor Sector Strategy

DHL Capabilities & Solution Sets

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 2

Market description Implications for Strategy Development

Market Trends Supply Chain trends

Market size and key players Market growth

Market size Market growth (USD, billion) #% CAGR

Source: Datamonitor, Gartner, Citigroup

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 5

Semiconductor Application Revenue and Growth

Military / Civil Aerospace

-17% 10,3% 12,1% 8,1% 1,3%

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 6

 Major outsourcing for A&T mainly Asia based

 Growth by industry sector is linear

 Only a small amount of consolidation has happened so far

 No new players have come into the market

 Structural changes required to deliver cost savings in supply chain

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 7

Contract Manufacturing Cluster (PCs, Devices, Handsets)

Semicon Assembly & Test

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 8

Semi-conductor Industry Facts & Trends

Changing Supply Chain Requirements

DHL Semi-Conductor Sector Strategy

DHL Capabilities & Solution Sets

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 11

Fab to Assembly and

Assembly Cross Docking

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 12

• There is a significant quantity of raw material OEM

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 13

Distributors – Key players and key offering Implications for Strategy

They provide a wide range of services and

• Material Management Programs As the semiconductor pull their stock holding

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 14

Supply Chain trends and key Challenges Overall characteristics

• Increased Capital Equipment moves Flexibility

• Limited to Capital Equipment Manufacturer

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 15

Requirements / expectations on logistic providers

1 Global visibility of end to end supply

7 Simplified rate structures

10 Cost Optimization * Strategic (e.g. business partnership, new growth

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 16

Buffer inventory Only

Assembly & Test

Supply Chain Visibility, Event Management and Optimisation

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 17

Buffer inventory Only

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 18

Semi-conductor Industry Facts & Trends

Changing Supply Chain Requirements

DHL Semi-Conductor Sector Strategy

DHL Capabilities & Solution Sets

Semi-Conductor Presentation Deck DHL Proprietary and Confidential 19

Storage & Semicon &