Semiconductor industry pulse report

Leaders remain positive despite the Russia-Ukraine war, chip shortage, and other geopolitical and regulatory issues

Significant geopolitical and regulatory events have recently transpired that can potentially impact the semiconductor industry. The Russia-Ukraine war (along with resulting sanctions and potential corporate disclosure requirements), rising global inflation and corresponding changes to monetary policy, and the U.S. Securities and Exchange Commission’s (SEC) proposed climate disclosure rules are just some of the new factors in play.

To gain insight on these latest issues, KPMG and the Global Semiconductor Alliance canvassed perspectives from C-level executives from the world’s largest semiconductor companies. The overall sentiment is that despite these recent challenges, the semiconductor industry is still well positioned to thrive in the next two years. Key findings include the following:

Only a minority (32 percent) are concerned the Russia-Ukraine war will materially impact the semiconductor supply chain in 2022 and 39 percent feel this way about 2023.
Just 18 percent are concerned the Russia-Ukraine war will materially impact industry revenue growth in 2022 and 25 percent feel this way about 2023.
The vast majority (83 percent) anticipate the semiconductor supply shortage will ease by the end of 2023.
Merely 18 percent are concerned about the impact of climate change legislation and reporting regulation.

As the semiconductor industry and adjacent ecosystem continue to determine the impact of these developments, here are some considerations for semiconductor leaders:

Russia-Ukraine war: Scenario planning for an uncertain future

As detailed in this report, leaders can prepare for a range of possible outcomes by taking these steps:

Identify key vectors of uncertainty
Build integrated scenarios
Draw cross-functional implications for your unique business

Russia-Ukraine war: Impact on supply chains and inflation

An economic analysis outlines that’s Russia’s invasion of Ukraine exacerbated supply chain challenges and supply-chain-driven inflation is unlikely to ease in 2022. Given the stressed state of global supply chains, business will need to consider strategies such as:

Onshoring and nearshoring production where possible
Diversifying raw material sources
Leveraging data analytics to model disruption, better gauge demand, and manage purchasing

Understanding the SEC’s climate proposal

In March 2022, the SEC released its proposed climate rules – The Enhancement and Standardization of Climate-Related Disclosures for Investors. This talkbook answers the top 10 questions about the SEC’s proposal – what it would require and how it may impact companies.

Read the report for additional insights for semiconductor company leaders.