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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.

What is the future of semiconductor and IoT?

With a product so heavily commoditized, the semiconductor industry will need to diversify services to drive high profit margins and keep shareholders happy. So how will semiconductor companies innovate and grow? Check out our new report for Internet of Things (IoT) opportunities and strategies on how you can win.

Read our latest report

China inside: Chinese semiconductors will power artificial intelligence
China is investing heavily in chipmaking facilities and talent in a bid for semiconductor independence. Growing worldwide demand for chips specialized for artificial intelligence (AI) puts AI squarely in the middle of China’s economic future.

Read the article.

Bringing AI to the device: Edge AI chips come into their own
​If you love your smartphone's AI-enhanced camera, wait until you find out what edge AI chips could do for enterprise.

Read the article.

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 this new market opportunity, semiconductor companies often need to shift marketing, sales, application engineering and product development approaches, and re-define go-to-market and monetization strategies.

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 is able to integrate information from many different sources. In order to enhance the value of digitalization, semiconductor companies should consider taking a look at emerging digital supply network technologies in order to solve age old problems in the industry 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.

The slowing of Moore’s Law and EUV
The fundamental economics and assumptions of semiconductor production are reaching a limit. Moore’s law has been slowing down over the last few years and soaring design costs are making the leading lithographic node economically out of reach for many companies. A strong trend of alternative designs, new multi-core architectures, die stacks, and multi-die packages show efforts to work around scaling performance limitations versus continue. Semiconductor companies can help by managing more complex back end assembly and test operations as the complexity increases and potential for yield loss increases due to more complex assembly. As the industry considers a shift to extreme ultraviolet lithography (EUV) or 450mm wafers to re-accelerate Moore’s Law, semiconductor companies, especially semiconductor equipment companies, need to be fully prepared.

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Looming talent gap challenges semiconductor industry

Despite impressive growth, the semiconductor industry is contending with a shortage of core skills and talent. Deloitte joined with Semiconductor Equipment and Materials International (SEMI) to conduct a Workforce Development Survey of industry executives. The report presents key insights from the survey and recommendations for addressing the talent shortage to position semiconductor companies for continued growth.

Read the new report.

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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

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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