Microprocessors (including GPUs used for AI) were ranked as the top product opportunity for industry growth over 2024
Implementing Gen AI was ranked among the top three strategic priorities for semiconductor companies over the next three years
The top three functions where semiconductor companies are expected to implement Gen AI in the next two years are: R&D, Marketing, and Manufacturing.
More than 8 in 10 (83 percent) of the 172 execs surveyed project their company’s revenue will grow over the coming year, which is in line with last year’s 81 percent. However, the rate-of-growth projections are slightly lower. This year, 4 in 10 leaders expect revenue growth of more than 10 percent. While still healthy, a full half of respondents (5 in 10) felt this way last year.
Leaders expect lower customer demand to have the biggest impact on their company over the next year, more than inflation, interest rates, or government subsidies.
Executives are significantly more enthusiastic than last year about industry revenue growth—85 percent forecast the industry’s revenue will grow in the coming year, compared to just 64 percent last year.
With the demand for technical talent only expected to increase, talent risk extended its lead as the biggest issue facing the semiconductor industry over the next three years. It ranked as the top issue in the previous two surveys as well.
Talent development and retention also remained atop the strategic priorities for industry leaders, once again ahead of supply chain resiliency.
Leaders increasingly view competition for talent as the main impact of nontraditional semiconductor companies (e.g., tech giants, platform companies, automotive companies, etc.) continuing to expand their own silicon capabilities, putting further strain on the talent pool.
In response to the mounting talent pressures, the top three actions semiconductor companies have taken to date are university partnerships, re-enforcing their employee value proposition, and offering remote/hybrid work positions.
In last year’s survey, 24 percent of respondents believed there was already an excess of semiconductor inventory. That amount increased to 30 percent in this year’s survey, driven in part by the aforementioned lower customer demand. An additional 12 percent think the next inventory excess will occur in 2024.
Reducing inventory levels was tied for the second most frequent action semiconductor companies have taken, or expect to take in the next year, in response to market forces and the economic environment. The postponing of capital expenditures, mentioned above, was number one.
Excess production capacity ranked as the fourth highest industry issue over the next three years, up a spot from last year’s survey.
Conversely, there is a faction of executives who believe emerging technologies like AI represent a continual growth engine. Almost one in five (19 percent) executives believe demand will keep increasing and there will in fact not be an inventory excess in the next four years. This is double the amount from last year’s survey (9 percent).