At present, a paradigm shift, referred to frequently as Industry 4.0—or Industrie 4.0 in Germany—is taking place. In international usage, terms like the (Industrial) Internet of Things, smart factory, or cyber physical (production) systems are often used interchangeably to refer to the same thing. Industry 4.0 refers to the global trend toward the digitization and networking of the industrial value chain and its products.
The high profile of Industry 4.0, particularly in Germany, is not only in the world of business. Industry 4.0 is also driven by politics due to its economic impacts, such as further developing the competitiveness of German manufacturing. In this context, political officials are promoting a dual strategy that combines the perspective of suppliers as well as the perspective of user companies, primarily in industrial automation and plant engineering. In doing so, it is important for manufacturers to use the newest technologies for their own production process and, on the other, to put these technologies and products on the market.
From the lead supplier’s perspective, the consolidation between the information or communication technologies and the classical high tech approaches mostly serves the expansion of the production sector and its technologies. In order to achieve this expansion, prerequisites owing to increasing market dynamics and market complexity will need to be met. From the manufacturing companies’ perspective, it is important to design intelligent technologies and products for new markets and to subsequently serve these markets. To meet the needs of suppliers and manufacturers, companies will need strategies that act on both perspectives. For example, companies from the semiconductor industry are good at employing these dual strategies.
Semiconductor manufacturers like Analog Devices are dealing with this complex concept to transform their own production lines into fully automated smart factories. In addition, these manufacturers provide innovative technologies to other companies within the manufacturing sector, which assist them in transforming their manufacturing facilities into smart factories. Thereby, an important role is given to small- and medium-sized enterprises, as they form the majority of Germany’s industrial enterprises (more than 98%). What exactly the type of support can look like, the challenges semiconductor manufacturers are facing with, and what opportunities are resulting out of Industry 4.0—these questions are examined below.
Companies need to decide whether or not a transformation of their manufacturing facilities into smart factories implies meaningless effort or an actual increase in productivity with a corresponding reduction in costs.
To find answers to the following crucial questions, numerous studies have been carried out by a number of market research companies. They all came to the same conclusion: Industry 4.0 will provide added value for small- and medium-sized enterprises and they should take the related opportunities to consolidate the company’s success. In particular for semiconductor manufacturers, the results of the studies can be classified into three fields: new technologies, new product offers, and new business models. All three fields together are covering the whole value chain of the production and its products—starting at the sensor node, via the cloud, and up to downstream services.
For the transformation into a smart factory, there is a mandatory need for intelligent and power-saving products, or rather completely autonomous systems that can be integrated into the existing production structure in a simple manner (like plug and play). These systems consist of various semiconductor devices and sensors, which are combined with analog and digital signal processing ICs. The value chain starts with these devices—first of all, the sensors are responsible for gathering data from the real, physical world and afterward they have to transform and process the data within the digital realm (see Figure 1).