The Executive Summary in the semiconductor business plan defines immediately whether the startup is a manufacturing operation or fabless manufacturing business. The fabless semiconductor business is more common for practical reasons. Building, owning, and managing a chip making plant requires millions of dollars, and the business is competing with foreign plants able to produce the semiconductors at a much lower cost. In the fabless manufacturing business model, entrepreneurs design and sell semiconductors and outsource fabrication. Another option is to become a distributor, selling finished semiconductors to other businesses on a wholesale basis.
Launching an electronics semiconductor business with or without an integrated supply chain requires high level business planning, which must be evident in the business plan to attract investors.
• What qualifies the business owner(s) to enter the semiconductor industry? Is it past positions held or prior experience in a technology business? Has a good team been assembled that is composed of experienced people who can help manage and grow the business? It may be necessary to form a partnership to get the right people on board. What is the legal form of the company?
• Where will the semiconductors be designed, and who will imprint the wafers and finish the products in preparation for selling? What business alliances are formed with factories to ensure a steady supply of products on an as-needed basis? Are there patents filed?
• The semiconductor industry is global with most manufacturing occurring overseas. Are there foreign alliances and partners involved in this business?
• Where are the key markets? The competitive analysis will identify main competitors and describe unmet market needs.
• Customers demand the latest technology, meaning the semiconductor business is subject to early obsolescence unless it can regularly produce and/or sell new designs or new products. What are the plans for R&D or ensuring wholesale product offerings are current in design?
• What marketing model will be used to sell the semiconductors? Most companies have one or more sales people and do website marketing. It is also possible to partner with other businesses.
• How much money is needed for startup and the first year of operations? Hardware companies require significantly more money for entry than software companies, but that also means there is less competition.
How to create a semiconductor business plan?
The semiconductor business is attractive to venture capitalists interesting in funding new technology. Entrepreneurs and innovators able to create the next generation of semiconductors and demonstrate the ability to stay ahead of technological changes can approach investors with confidence. However, they can only do so if they have a solid semiconductor business plan that accurately assesses the potential for financial success and includes a thorough assessment of risks.
OGS Capital consultants have the knowledge and expertise needed to assist entrepreneurs with semiconductor business plans for startup, addressing all aspects of the business from design to manufacturing to financial projections. Complete the short form to discuss the business plan development process and how OGS Capital can help the entrepreneur produce a roadmap for success.
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