The rise in demand for semiconductors, or the urge to establish local fabrication facilities within the Americas, has prompted the DHL Industrial Projects division to engage more actively in the sector. Following the shortage of semiconductors during the pandemic, companies looked for ways to mitigate the shortage. One of the solutions was to source locally, which meant more construction work and more opportunities for the likes of DHL Global Forwarding.

Jake Swanson, Vice President of DHL Industrial Projects in the Americas, has seen the demand for the company’s activity come from various sectors, however, the semiconductor industry seems to be the highlight, on top of the traditional oil & gas and mining industries.

Stationed in Houston, one of the major Hubs for Project Logistics in the United States, Swanson is at the heart of the centre where all the pivotal decision-making takes place, especially for the oil & and EPC construction industries. He oversees a team and a market filled with opportunities.

“EPCs play a crucial role in decision-making for various projects. They are responsible for procuring materials and often collaborate with project forwarders to handle the logistics of moving those materials from the source to the project site. EPCs are involved in many sectors, including mining, oil and gas, offshore, infrastructure, and government projects. Moreover, the renewable energy sector has also emerged as a promising area for project opportunities, with wind power, green energy, and solar projects gaining traction in our Americas projects group over the last three years,” Swanson tells Project Cargo Journal.

However, there is another interesting sector that is becoming an important source of activity, a sector that DHL Global Forwarding has ventured into recently, and that is the construction logistics for large semiconductor facilities.

“Traditionally, projects were associated with oil & gas companies and offshore oilfield service companies. However, in the last three to four years, we’ve been working on a lot of semiconductor projects. This has become even more important after the pandemic, when there were challenges with the general supply of semiconductors. This shortage affected manufacturers in the region that require semiconductors for various electronics. To mitigate this, companies have started to think about regional sourcing for semiconductors, which has led to a boom in this area,” says Swanson.

This resulted in more facilities being established in the region to cater to the demand for semiconductors. “We are expecting to see more technology companies establish fabrication facilities in the region over the next few years. The CHIPS and Science Act, which was passed by President Biden about a year ago, has legislated certain requirements such as buying materials within the US. This has encouraged a regional approach, particularly in the semiconductor space. As a result, we’ve prepared ourselves for this shift and have found it to be an interesting and unique type of project,” adds Swanson.

The Shift

Over the last few years, governments and the private sector have looked for ways to ensure a smooth operation of the supply chains. Buzzwords like nearshoring and friendshoring have been used quite often. And while friendshoring may not be the ultimate answer, it seems like this shift towards local sourcing is becoming popular in the Americas.

Swanson notes that DHL Global Forwarding’s clients within the mining sector have expressed interest in buying locally. “Previously, these companies would source goods globally, but due to the pandemic, they have changed their supply chain model to be more regional. A company we work with has completely changed its approach and wants to primarily service its mines in the Americas with equipment sourced locally,” Swanson said.

But the trend does not stop at the mining companies, as semiconductor fabrication facilities are being built in areas like New Mexico where highly-skilled workforce can be found at lower cost.

Specific requirements

The Semiconductor industry comes with its own set of challenges. They may not require a lot of heavy lifting and specialized equipment but they do require care and precision.

“While some components are similar, the projects themselves are quite different from oil & gas projects due to the sensitivity of the components and the need for specialised storage, such as warehouses. Unlike oil & gas projects, components cannot be left outside for long periods of time without proper protection,” Swanson adds.

When comparing the semiconductor industry to oil & gas or offshore wind projects, it is evident that the size and weight of the components required for semiconductors are not as significant. However, the sensitivity of the components and the need for specialized storage, such as warehouses, make it a unique and interesting project in its own right.

Moreover, there are some developments in the semiconductor industry where modularisation is starting to enter. These fabrication units are being shipped in a modular way, built at the production facility to reduce installation time once they reach the project site. This concept is not as big as in oil & gas projects, where mega modules of over 1,000 tons are required.

“This modularisation approach is also useful in low-cost areas, such as the South, where labour costs are lower. The fabricated modules can be shipped to heavily unionized areas like New York, avoiding additional costs. Additionally, building these facilities in areas with more agreeable climates can reduce the work required on-site, allowing for easier and faster connections between the modules,” Swanson said.