A Digital Twin–Based Approach to Reinforce Supply Chain Resilience: Simulation of Semiconductor Shortages

Abstract

Semiconductor shortage adversely impacted industries and stress-tested supply chain (SC) resilience. One of the lessons learned through the semiconductor crisis is that low SC visibility intensifies the severity of the ripple effect caused by chip shortages. Digital SC twins have a high potential to assist resilience analysis in semiconductor SCs because the industry is rich in data and has deployed simulations for a long time. In this study, we examine how chip makers can cope with the ripple effect by the balanced approach combining case study and simulation. The case studies of Intel Corporation and Infineon Technologies reveal that both operational and disruption risks account for chip shortages. Manufacturing flexibility is the key resistance measure that the leading chip makers utilize. Efficient contingency plans, supplier collaboration, and repurposing help them in capacity adaptation. The simulation results underscore the consequences of disruption risks and exemplify an aggravated disruption overlay. We also discuss the potential employment of a digital SC twin to remedy ripple effect and deliver trusted solutions in the high time-pressure context.