Today, Resilinc announced that leading global supply chains have become dependent on the same small group of sub-tier suppliers – concentrating the risk and significantly increasing the potential for crippling supply chain disruptions. Based on global supply chain mapping data that it gathered over the past year, which analyzed a subset of data from over 600 large and medium suppliers across 2,500+ sites spread over 50+ countries, Resilinc performed a detailed analysis in order to identify specific industry trends that could be used to create stronger supply chain resiliency plans.
This study, which focussed on the analysis of sub-tiers that often hide risks that go undetected by the buying organization, not only found that global supply chain risk tends to be concentrated in certain sub-tier suppliers and localities, but also found that many leading global supply chains, in the High-Tech and Automotive sectors in particular, have become dependent on the same small group of sub-tier suppliers.
In particular, the study found that in the High-Tech and Automotive supply chains, the vast majority of suppliers are dependent on sites that are owned by just four suppliers and that more than 50% of all sites analyzed are located in just four countries: Taiwan, China, the USA, and Japan. Who are these four suppliers that can control the fate of your entire High-Tech or Automotive Supply Chain? Taiwan Semiconductor (TSMC), with an 83.8 B market cap; Amkor Technology (AMKR), with a 926 M market cap; ASE Inc, with a 191.5 B market cap ; and United Microelectronics (UMC) with a 5.2 B market cap. With a combined market capitalization of over 281 B, these fateful four suppliers have a commanding control of your High-Tech and Automotive Supply Chains.
For more information on how visibility can improve your supply chain resiliency, see the IDC Manufacturing Insights on Arguing the Case for Supply Chain Resiliency in 2013 (registration required).