Procurement tool aims to bolster semiconductor supply chain

An AI-enabled electronic components procurement tool claims to boost OEM productivity by leveraging a software platform that negotiates prices, tracks spending, and monitors savings in real time. It takes your bill-of-materials (BOM) and uploads it to the system while leveraging AI agents to discover form-fit-function compatible parts and more.

ChipHub, founded in 2023, is a components procurement tool that aims to optimize operations and savings for OEMs by addressing the supply chain issues at the system level.

Figure 1 A lack of control on component pricing, availability, and spending matrices makes the supply chain operations challenging. Source: ChipHub

A standard components procurement tool

Envision a procurement platform empowering OEMs to directly engage with suppliers, enhancing control over annual expenditures ranging from millions to billions of dollars. Such a platform streamlines interactions with suppliers, fostering efficient negotiations and monitoring of cost-saving metrics.

A tool that, at a very high level, enables OEMs to negotiate commercial terms directly with suppliers, all on the platform with no emails and spreadsheets. It can support millions of SKUs and thousands of suppliers with four fundamental procurement premises.

1. A scalable platform that facilitates supplier negotiations.
2. It offers risk reduction because the component supplier knows who the end customer is.
3. It employs generative AI to allow technical teams to evaluate devices or specs while extracting information from the datasheet and performing cross-part analysis.
4. It provides record-keeping features to monitor savings for procurement staff.

Enter ChipHub, an AI-driven procurement tool tailored for hardware OEMs. Its agentic system leverages Model Context Protocol (MCP) to enable collaboration between multiple AI agents and humans to deliver the information supply chain professionals need. Features like this help reform component sourcing by offering time and cost efficiencies irrespective of the OEM’s scale.

Next, ChipHub offers the unified marketplace framework (UMF), which helps procurement teams across diverse sectors such as data centers, computing, networking, storage, power, consumer goods, industrial, and automotive. Users can implement UMF in a single day and start monitoring their spending and savings in real time.

Figure 2 The procurement tool enables OEMs to negotiate commercial terms directly with component suppliers and do it right on the platform. Source: ChipHub

Users such as procurement managers use the platform to search specific parts, and the system conducts cross-part analysis to find compatible options, including real-time pricing and inventory data from various ecosystem partners. So, they don’t have to spend hours manually searching for data and building comparison matrices.

The platform uses a system of multiple AI agents, with human oversight, to navigate the supply chain and provide insights into part availability and sourcing options. “We don’t house any parts; we are just enabling supply-based management,” said Aftab Farooqi, founder and CEO of ChipHub.

Do I really know my supply chain? According to Farooqi, that’s the fundamental question for procurement managers. “If they don’t have control and visibility of their supply chain, they could be vulnerable,” he added. He also acknowledged that ChipHub isn’t a solution for all OEMs.

“They could keep doing things the way they are doing,” Farooqi said. “But they can still subscribe to this platform and have it as a validation tool.” For example, OEMs can cross-check the signal integrity analysis of a particular component.

Farooqi added that the platform can also be used by contract manufacturers (CMs) as a key tool for risk reduction because it enables spend tracking and collaboration features on the platform.

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