Enhancing security, increasing visibility, and anticipating customers’ needs are a few ways we believe Blockchain 2.0 will impact the semiconductor supply chain.
Blockchain, a foundational tool for cryptocurrencies, offers the prospect of secure transactions connected through an encrypted network to process contracts and tokens and to store massive amounts of data. Coming online with the first transaction in 2009, cryptocurrencies continued to fuel Blockchain growth and enthusiasm. But, the broader scope of original Blockchain offerings have been criticized as “[generating] some of the biggest hype in the history of IT before flaming out in a morass of abandoned deployments and failed expectations.”
What was behind the failed launch? Forbes Business Council cites a “lack of enterprise readiness, from inflexible storage solutions to missing compliance regimes to poor scalability and high costs.” But the latest iteration of this technology, known as Blockchain 2.0, has brought into play a range of more practical applications, including simpler data privacy solutions and streamlined services for authentication and authorization.
While initially Blockchain seem to linger just on the horizon for many industries— including the global semiconductor supply chain — 2.0 has warmed up the promise of this technology. McKinsey recently cautioned, “If blockchain were a tool, it would be a Swiss Army … [b]ut like a Swiss Army knife, blockchain can be unexpectedly complicated.”
Blockchain applications for chips continue to emerge. Here are 3 ways we predict Blockchain 2.0 will impact the semiconductor supply chain.
3 Ways Blockchain 2.0 Will Impact the Semiconductor Supply Chain
1. Supply chain security
Shortages often exacerbate quality concerns in the semiconductor supply chain. Blockchain 2.0 integration in to the semiconductor manufacturing process could make it possible to track and authenticate semiconductors, but the technology is not yet widespread.
One example on the market is from Infineon Technologies. Infineon offers an NFC cryptochip, which connects the intangible world of blockchain to a physical security solution. The chip is attached to a product and can be scanned to authenticate the product, creating a barrier to counterfeiting. Infineon also offers cards with the crypotchip that can be used to blockchain keys, among other applications.
With the powerful driver of securing chip supply chains, innovative uses for Blockchain 2.0 in the global semiconductor supply chain will continue to emerge.
2. Visibility in the unwieldy global supply chains
Automakers are grappling with increasingly complex global supply chains. Recovery from the hit of the 2020 pandemic and the resulting supply chain challenges are ongoing as manufacturers seek to shore up chip supplies and secure supply chains from future upheaval.
The Mobility Open Blockchain Initiative (MOBI) is a consortium of auto and chipmakers working together to apply Blockchain technology to the automotive supply chain to track both chips and other components seamlessly throughout the automotive production process. This would allow authentication of chips to create another layer of security and transparency in sourcing, as well as streamlining automotive recall procedures.
With these applications, Blockchain 2.0 could bring enhanced visibility into the automotive supply chain, supporting a more secure and streamlined global semiconductor supply chain for this industry.
3. Anticipating customers’ needs
Semiconductor manufacturers themselves may ride the wave of Blockchain 2.0 best by anticipating their customers’ needs, McKinsey points out. McKinsey’s take for semiconductor manufacturers emphasizes the SAAS aspect. Strong Blockchain as a service (BaaS) offerings combining hardware and blockchain platforms and tools will differentiate the leaders from those companies that continue to focus solely on hardware.
While the full impacts of Blockchain 2.0 are developing, opportunities for the global semiconductor supply chain are emerging, in part driven by manufacturers’ need to take control of the unwieldy global semiconductor supply chain.
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