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Semiconductor Industry Trends and Growth

Navigating market disruption

For over 50 years, the semiconductor industry has had an amazing history of scientific innovation, productivity, wealth creation, and enablement of technologies and devices that have improved quality of life for mankind. However, the industry is at a unique point unseen in the high growth and volatile history.

Semiconductor industry overview

First the good news, silicon device demand continues throughout our world as computing power is increasingly required in all parts of life. Moreover, overall industry volatility has reduced as no one product is the dominant consumer of components at any given time as in decades past. On the downside, the fundamental assumptions of scaling according to Moore’s law are increasingly a factor in device design and manufacturing investment leading to new architectures, structures, materials, and methods. As of late, the industry has also consolidated significantly following the same path of past maturing industries. The result is a consolidated industry optimized for profitability, efficiency, and scale to serve the evolving end market needs.

As the industry matures, an external trusted advisor is often helpful to navigate new challenges, redefine processes and systems, and help manage uncertainty in the face of industry challenges. The Deloitte Semiconductor practice is able to bring the strength of our multi-service, global organization to help with the most critical issues while understanding the complexities, nuances, and uniqueness of the industry.

SEMICON West 2020

Whether you manufacture the equipment, manufacture semiconductors, or are FAB-less, visit our virtual booth to access on-demand content 24/7, view our demos, and engage with our thought leaders to discuss topics that are top of mind for semiconductor executives, including workforce transformation, moving to the cloud, and more.

Our virtual booth is still live. Explore our content and engage with us.

Semiconductor industry trends

IoT: Connected revolution
Semiconductors serve as the foundation for enabling emerging Internet of Things (IoT) technologies. The IoT revolution has increased the demand for semiconductor chips but also shifted value capture to software and solutions. To capitalize on emerging vertical industries in automotive, healthcare, manufacturing, and government, semiconductor companies often need to shift marketing, sales, engineering, and product development approaches. This shift is complicated in a world that is increasingly constrained by trade wars and COVID-19.

Digital supply networks
Digitalization is transforming supply chains in every industry. In most cases the transformation is a shift from a structured, linear system to an open, interconnected, often cloud-based system that integrates information from many different sources. Semiconductor companies should consider emerging digital supply network technologies to solve age old industry problems stemming from limited information transparency across the manufacturing and supply chain.

Consolidation through M&A
As semiconductor industry growth slows in individual segments, companies are increasingly turning towards mergers and acquisitions (M&A) to sustain profitability, seek new sources of revenue, and reduce revenue volatility through a diversified portfolio of products or solutions in the case of IoT. To help ensure value capture, semiconductor companies should consider developing a clear M&A strategy and drive execution.

Cloud
In the world of Chips, Merchant Silicon paves the way for disaggregation. It is becoming more important to differentiate proprietary ASIC (Application-Specific Integrated Circuit) solutions from DIY ( Do it Yourself ) White Boxes. There are no one size fit all Cloud Solutions which can cater uniformly to functional and product workloads for accelerated development and better time to market. Hybrid Cloud Environment is not an economic decision but an imperative for an efficient interoperable data hosting ecosystem. The need for robust DevOps, microservices, security, and network designs will be foundational for running such complex ecosystems.

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Brandon Kulik

Brandon Kulik

Principal | Deloitte Consulting LLP

Brandon is a principal in Deloitte Consulting LLP’s Technology, Media, & Telecom industry practice and leads the Semiconductor Industry segment. Having worked in semiconductor distribution and go-to-m... More

Christie Simons

Christie Simons

Partner | Audit & Assurance

Christie is a partner in Deloitte’s Accounting and Advisory Practice with more than 25 years of experience serving global technology clients. She is a specialist in serving fast growing, dynamic ventu... More

John Ciacchella

John Ciacchella

Principal | Deloitte Consulting LLP

John is a principal in Deloitte Consulting’s Technology, Media, and Telecom industry practice. He has more than 30 years of experience helping technology companies through a variety of strategic and o... More

Chris Richard

Chris Richard

Principal | Deloitte Consulting LLP

Chris is a principal in the Supply Chain and Network Operations practice at Deloitte Consulting LLP, focused on supply chain strategy and product development for the semiconductor industry. He has mor... More

Saikat Pattadar

Saikat Pattadar

Principal, Deloitte Consulting LLP

Saikat has spent 20 years in Technology and Semiconductor sectors with Sales and Delivery experience in Large Operate environments, Day two mergers and acquisitions integrations, and transformation pr... More

Joseph Fitzgerald

Joseph Fitzgerald

Principal | Deloitte Consulting LLP

Joseph is a principal in Deloitte’s Supply Chain practice focused on high-tech supply chain strategy, product development, and manufacturing. Joseph leads Deloitte’s supply chain innovation offering i... More

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