Insight

Semiconductor industry outlook for 2018

Semiconductors are a $412 billion global industry and encompasses products such as sensors, microprocessors and memory devices.

Semiconductors are a $412 billion global industry and encompasses products such as sensors, microprocessors and memory devices. Since these are the building blocks of all modern technology, trends and innovation in semiconductors have a direct impact on all downstream technologies.

This is why KPMG’s Global Semiconductor practice produces an annual industry outlook report. This year’s report is titled Semiconductors: Can the surge continue? After a record-breaking 2017, the report provides insight from 150 global semiconductor executives as well as KPMG’s distinct perspectives on 2018 and beyond. Key findings include:

  • Semiconductor leaders expect 2018 to be another year of growth for industry revenues though the industry will be hard pressed to match the historic growth rate of 2017.
  • 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.

This report is geared towards Semiconductor CEOs, COOs, CFOs, VPs of strategy/corporate development, as well as executives from companies whose products are heavily reliant on semiconductor products, including electronics, telecommunications, IoT, and automotive. We believe there are several important topics that semiconductor leaders need to pay attention to in 2018:

  • Product and system security
  • R&D efficiency
  • Culture risk

Read the publication to learn more.

Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.

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