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Strengthening Diversity in Semiconductor Supply Chains

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Strengthening Diversity in Semiconductor Supply Chains

By: Jackie Sturm Corporate Vice President, Global Supply Chain Operations at Intel Corporation

“Creating a more diverse and inclusive semiconductor ecosystem is pivotal for long-term economic growth. By working with diverse owned suppliers, we can increase resiliency, drive broader innovation, and generate new value within our global supply chain and the communities in which we operate.” - Jackie Sturm Corporate Vice President, Global Supply Chain Operations at Intel Corporation

Creating opportunities for diverse business owners to thrive isn’t just good for individuals and communities. It’s good for business. According to a 2020 study by McKinsey and Co., businesses that increase diversity and inclusion in the workplace have 19% higher innovation revenues, maintain a 35% performance advantage over their homogenous counterparts, and are 36% more profitable.

These benefits can also be realized by creating a more diverse and inclusive semiconductor ecosystem. By working with diverse-owned suppliers, we can create more resiliency, while generating greater innovation and value within our global supply chain and the communities in which we operate.

Intel officially launched its Supplier Diversity and Inclusion program in 2015. Two years ago, we announced that we would increase our global annual spending with diverse suppliers to $2 billion by 2030—a 100% increase from our 2020 goal of $1 billion. Today, we are on track to reach the $2 billion goal ahead of schedule.

We recently had a chance to catch up with three businesses that participate in Intel’s Diverse Supplier program, and here’s what they had to say about diversity, inclusivity, and what the program means to the semiconductor industry.

Diversity, Inclusivity Lift Up Communities

Developing a diverse semiconductor ecosystem creates opportunities for Americans from historically underserved communities, including people of color, people from rural communities, veterans, and women.

“Some of the ways supplier diversity positively impacts communities is by increasing opportunity for underrepresented businesses and uplifting communities through job creation and wage increases, which puts money back into the community,” said World Wide Technology, LLC, co-owner David Steward in a written interview.

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David Steward, Founder and Chairman, and Jim Kavanaugh, Co-Founder and CEO, World Wide Technology

St. Louis, Missouri-based World Wide Technology is a global technology solutions provider that now sees $17 billion in annual revenue. It helps conceptualize, test and validate innovative technology solutions and then deploy them at-scale through its global warehousing, distribution, and integration capabilities.

Owners David Steward and Jim Kavanaugh joined Intel’s supplier program in 2016 and have since demonstrated significant scalability by expanding to provide integrated IT systems and services for Intel’s global footprint. WWT helped streamline a complex process and boosted global support for Intel’s network equipment and security solutions.

Today, World Wide Technology is one of the largest Black-owned companies in the U.S.—operating 55 facilities globally and employing more than 9,000 people—with a robust supplier diversity program of its own that advocates for greater engagement with minority-owned businesses and significantly contributes to their local diverse communities.

“We are fortunate to be in a position to give back and support other small, disabled, minority, veteran, and women-owned businesses and provide the same level of support we were given when our company was finding its roots decades ago. Together, we can enable transformational business outcomes to drive inclusion and economic growth in our communities—one partnership at a time,” David said.

Drives Innovation

For the U.S. semiconductor industry to maintain its global competitiveness, we must think differently. Supplier diversity is at the core of how we innovate within the technology ecosystem.

While the tech industry has traditionally looked white and male, new initiatives are opening opportunities for diverse STEM suppliers to compete. The U.S. STEM workforce fuels innovation and provides important contributions to the nation. New advancements are rapidly changing the world of work and increasing the demand for employees with technical skills. As this demand has increased, so has the number of STEM workers.

In 2021, 34.9 million people worked in STEM occupations, up from 29 million in 2011, according to a report by the National Science Foundation. Nearly a quarter of today’s U.S. workforce is employed in STEM occupations; yet, more work needs to be done to increase the representation of women, persons with disabilities, and persons from Hispanic or Latino, Black or African American, and American Indian or Alaska Native communities.

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EUV Tech, Inc. Team Members at Semicon Conference

Minority owned, EUV Tech, Inc., is the world’s leading supplier of at-wavelength EUV metrology equipment, which is found on semiconductor production lines around the world. Rupert Perera, Ph.D. founded the company in 1997 and began partnering with Intel in 2001. EUV Tech delivered its first tool to Intel’s components research group in 2004.

“There are a lot of great reasons for companies to prioritize a diverse supply chain,” Rupert said in a written interview. “It’s especially crucial in STEM disciplines, where these fields still struggle with both cultural and gender diversity. This can filter down in a positive way into local communities by helping suppliers attract and retain diverse talent, investing in student internship programs, and growing demand in general for STEM jobs.”

EUV Tech’s partnership with Intel has been integral to its success—as well as for the development of next-generation semiconductor metrology equipment, Perera said.

“Intel’s support has helped fuel the growth of our product portfolio and has helped improve our products to meet the requirements of EUV production lines,” he said. “Intel has helped both our innovations in products and allowed us to hire talented individuals to bring those concepts to life.”

The Value and Economic Impact of Diverse Supply Chains

The semiconductor ecosystem has an immense impact on people’s lives, yet we strive to have an equal, if not greater, impact on how our supply chains affect communities.

Diverse-owned businesses are a major growth sector in small businesses across the U.S. As of 2021, there were 15,206 certified minority-owned businesses, according to the National Minority Supplier Development Council. Those companies accounted for $242.7 billion in sales.

Long-term U.S. economic growth and global competitiveness hinge on tapping into that diversity, not only within individual companies, but also through their partners and suppliers.

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Photo of Elizabeth and Gabe, founders of Jack’s Mechanical Solutions, Inc.

Elizabeth and Gabriel Martinez, both U.S. veterans, founded Jack’s Mechanical Solutions, Inc., an Albuquerque-based mechanical contractor, in 2004. In 2006 they became an Intel supplier, supporting facilities in Rio Rancho, New Mexico, and Chandler, Arizona.

“Our partnership with Intel has allowed our continued success in developing and improving our skills at all levels from the field to project support and management,” Elizabeth said. “It provides opportunities for so many in our community. We have been building new teams and new ideas working together with Intel for success.”

These business partnerships create ripples of economic activity across communities. Today, Jack’s Mechanical Solutions employs 167 people across two states.

Hiring diverse suppliers “provides opportunity by creating jobs in the community which will help build stronger, more successful communities,” Elizabeth said.

Diversity is Mission-Critical

The bottom line is that expanding Intel’s supply base with diverse suppliers helps us build a more resilient semiconductor ecosystem. For Intel, it’s not added work. It’s how we work.

A diverse supply chain leads to better problem-solving, creates a larger talent pool, and is essential for economic growth. Each of these highlighted suppliers were selected based on the same standards as their traditional category competitors and those measures are updated quarterly based on their actual performance with resoundingly positive outcomes.

Intel spent $1.4 billion with diverse-owned suppliers in 2021, 10 times the annual amount we spent when we kicked off our supplier diversity program in 2015. Today, Intel’s diverse supplier program includes businesses in more than 26 countries that are at least 51% owned and operated by women, minorities, U.S. Veterans, people with disabilities, and LGBTQ+ individuals.

This marks substantial progress toward our 2030 goal to reach $2 billion annually. Intel’s belief in a more inclusive supply chain allows for greater competition and opens the ability for money to flow to any qualified and capable supplier, while leveraging our purchasing power to address social gaps in fair business practices. 

To learn more about Intel’s Supplier Diversity & Inclusion program, visit intel.com