By Lincoln Clark, Partner-in-charge, Global Semiconductor Practice, KPMG in the U.S.
The year 2017 surprised everyone. It was an exceptional one for the semiconductor industry—more than anyone expected. High-voltage revenue gains among the biggest semiconductor players led to record-breaking industry-wide performance.
How will semiconductor companies follow such remarkable performance in 2018 and beyond? How can semiconductor executives flip the right switches within their organizations to turn an unexpected spike into a prolonged surge of steady, upward growth?
For KPMG’s annual global semiconductor outlook, titled Semiconductors: Can the surge continue?, we surveyed executive-level insiders about their perspectives and expectations following this banner year. We asked them about what sectors, products, and geographies will drive demand; what forces will impact their strategies; and what parts of their internal businesses they will invest in or transform. Key findings include:
- The demand from artificial intelligence, cloud, and IoT for semiconductor products is expected to have greater impact on revenue in 2018 compared to prior years. Wireless communications should be a top revenue driver beyond 2018 as 5G networking begins to ramp up and roll out.
- More than half (51%) of the respondents admitted their R&D spending is not efficiently aligned with their market opportunities.
- Respondents again rated “diversifying into new businesses areas” as their top strategic priority, followed by M&A, and talent development/management.
- Cyber security and implementing disruptive technology saw significant increases in their importance for 2018, but articulating vision/culture/purpose and diversity/inclusion sharply declined.
- Average Sales Price (ASP) erosion is still seen as the top industry issue for the next three years but by a slimmer margin than last year. Keeping pace with diverse customer demands jumped to number two this year.
Leveraging findings from our survey data and insightful analysis from KPMG’s semiconductor practice leaders, this report sheds light on noteworthy industry trends, emerging issues to watch out for, and key areas of opportunity for global semiconductor companies.
Read the publication to learn more.