The art of semiconductor supply chains

Although seemingly unrelated, transporting irreplaceable artefacts and semiconductor-related products both require intricate logistics solutions. Few companies have expertise in both domains, yet NX Group stands out as an exception, being one of Asia's largest global logistics providers.
The Japanese logistics provider excels in transporting artefacts and art, successfully handling iconic pieces like the mask of Tutankhamun and the Venus de Milo.
The Japanese-based company is a leading provider of forwarding, warehousing and logistics solutions in the Japanese semiconductor sector. It is extending its reach to global chip makers beyond Japan, continuously expanding its capacity and capabilities. Over the last two years, NX Group has built eight additional warehouses, exclusively catering to emerging semiconductor fabrication plants globally. Notably, these plants serve some of the top semiconductor makers in Japan, the US, Ireland and Taiwan.
More projects are in the pipeline, such as plans for developing facilities to service a new semiconductor factory under construction in Germany.
In 2022, NX Group's global semiconductor logistics sales reached ¥77.4bn, exhibiting the strongest growth out of its five targeted domains, which encompass electric and electronics, automotive, apparel, and the pharmaceutical and medical industries.
Leveraging expertise in semiconductor logistics
Satoshi Otsuji, executive officer of NIPPON EXPRESS HOLDINGS, INC., recalls how the logistics provider once handled a 1,300-year-old Buddhist statue made of lacquer and lacquer-impregnated cloth, employing custom-made Japanese paper packaging.
"Though it's hard to quantify, it's this kind of sensitivity and mindset towards transport that makes NX Group particularly capable at semiconductor logistics," he says, highlighting the significance of precise handling and specialised packaging in both domains.
Despite semiconductors being manufactured in trillions — unlike one-of-a-kind artworks — handling these minuscule chips and their equipment demands equal meticulous care and attention. Semiconductor wafers are highly sensitive to temperature, humidity, shock and vibrations, static electricity and dust. A fabrication plant requires the use of multimillion-dollar equipment, including machines that weigh several tonnes and are highly sensitive to the slightest changes, from tilt to temperature. Therefore, the process of delivering such machinery and its parts to clean rooms, and sorting tiny chips, demands a surgical level of cleanliness and precision.
Satoshi Otsuji Executive officer at NIPPON EXPRESS HOLDINGS INC.
Over the years, NX Group has amassed extensive domain expertise through collaboration with Japan's globally dominant players in semiconductor manufacturing equipment and raw materials, including silicon wafers, photoresists and various chemicals. Now, the company is leveraging this wealth of knowledge for its global operations.
"We have ramped up the number of staff specialised in semiconductor logistics, and these experts are being sent to enhance already existing knowledge present in the regions," says Jasper van Oudenhoven, general manager in the sales strategy division of the Global Business Headquarters for NIPPON EXPRESS HOLDINGS INC.
"We are not a template company, so we try to customise, working closely with our clients," he says. "We get the requirements and then build our solution, sometimes deploying people even before there is any tangible business opportunity. I think that approach fits perfectly to meet the rigorous needs of semiconductor buyers."
Building resiliency into supply chains
In addition to the intricate procedures involved in transporting semiconductor products, recent disruptions to supply chains have exposed the fragility of the industry's networks. The pandemic, surging demand and geopolitical shocks have caused crippling global chips shortages. While the situation is gradually improving, the sector is striving to build resilience into the procurement and distribution of these chips, which are becoming increasingly vital in all aspects of our economy.
"The pressing challenge for the semiconductor industry today is balancing flexibility with costs," says Otsuji. "Logistics companies, including ourselves, have been working to optimise both."
The recent surge of reshoring semiconductor production necessitates the establishment of a new ecosystem of logistics services spanning production, procurement and sales for the numerous layers of suppliers and buyers in the industry. With many new factories and emerging semiconductor clusters, such as those in Kumamoto, Japan, and Arizona, USA, situated far from major gateway airports, Otsuji highlights the demand for flexible transport options to connect new foundries to the rest of the world.
To this end, NX Group possesses unique assets, encompassing hardware such as warehouses adjacent to top semiconductor factories, logistics centres next to international airports, and specialised vehicles such as air-suspension trucks. Additionally, the company leverages software tools like a global inventory control and tracking system. NX Group continues to invest in human resources, with an increasing number of staff trained for semiconductor-related sales and transport. These combined assets hold great significance for the company's future operations in the semiconductor industry.
"We have shifted our focus on forwarding services and contract logistics in general. We have also reinforced our global sales team with those dedicated to semiconductors in each region," says Otsuji. "They are now out spreading the word of our expertise. These seeds that are sown will hopefully be reflected in sales figures in the upcoming months."
He envisions the company utilising these assets to offer "end-to-end" services for global chip makers, integrating a cutting-edge digital solution capable of visualising the various moving parts throughout the global supply chain.
Jasper van Oudenhoven General manager in the sales strategy division of the Global Business Headquarters for NIPPON EXPRESS HOLDINGS INC.
"Recently, customers are often positively surprised about the magnitude and capability of NX Group and the fact that we do business with most of the top 20 semiconductor companies," says Van Oudenhoven. "Once a customer starts to engage us for business, we tend to grow rapidly organically. You cannot have a better reference than customers who want to grow with you after they have started to do business."

This content was paid for and produced by Nippon Express in partnership with the Commercial Department of the Financial Times.

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