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How Precious Metal Treatment Costs Put the Semiconductor Industry at Risk

First in a 3 Part Series on Protecting the Semiconductor Industry.

 

“Semiconductors are the brains of modern electronics,” according to the SIA, “enabling technologies critical to US economic growth, national security, and global competitiveness.” Therefore, the health of the semiconductor industry is also critical.

However, semiconductor manufacturing companies often take on unnecessary risks when they conduct business overseas. Specifically, running a semiconductor manufacturing plant overseas presents 3 major risks when it comes to the reclamation of their precious metals:

    1. Loss of Revenue
    2. Penalties and Fines
    3. Theft of Intellectual Property

 

These risks, when not addressed, create significant problems that ultimately impact the overall health of the semiconductor manufacturing company.

Treatment Cost Structure 

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Treatment cost structure is the first of three ways that Security Directors, Environmental Managers, & Reclaim Managers can address these challenges more effectively and create greater security for their semiconductor manufacturing company and the industry as a whole.

Treatment cost involves a cost per lb. to treat a specific material. The cost structure will vary depending on the processing method applied. Several factors determine which processing method is best, such as:

  • Material type
  • Metals Contained
  • Lot Size

 

Most semiconductor manufacturing companies hope to secure a low-cost structure for the processing of their various materials. And at first glance, this seems like an entirely profitable, and therefore logical, decision.

Why Is This a Risk?

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However, low treatment costs are a lure precious metal reclamation companies may use to get your materials in their door. 

Treatment costs are often the first criteria Purchasing Agents use to determine which precious metals reclamation company to do business with because it’s a simple, known expense. Therefore, they offer you lower upfront treatment costs as an incentive for you to send them your materials.

Why is this a lure? Because the real money is not in the treatment costs alone, but in a combination of the treatment costs & the correct amount of recovered metals! In short, you must know the value or metal contents in your materials in order to evaluate the true cost of refining your materials

Before you send out your materials to be treated, how accurate is your estimation of the amount of precious metals in the lot?

If you’re like most companies, you’re not very accurate at all. This means there could be more precious metal that can be recovered than you would expect. And that is where your precious metal reclamation company could make up the difference. 

They may recover additional precious metals and copper from your processed materials by shipping the lower grade remnants to a smelter to recover these metals if they use ineffective processing techniques.

Protect Your Company. Reduce Your Risk

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Given the large amount of metal being processed through the semiconductor industry, the potential for monetary loss is huge. So you want to choose your precious metals reclamation company carefully. 

Next week, I’ll share the second of three ways that the semiconductor industry can reduce risk protect its investment. If you’d like to jump ahead and learn all three at once, plus the top 3 criteria for evaluating your precious metals reclamation company, you can download our full report now.

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