Menu
Wireless growth, IoT and cars will drive semiconductor demand

Wireless growth, IoT and cars will drive semiconductor demand

Supply chain and talent retention issues were cited as top priorities for a semiconductor industry seeing huge and growing demand for its products, according to a new KPMG report.

Credit: Dreamstime

The ongoing deployment of 5G networks, Internet of Things (IoT) and the automotive sector are the three biggest drivers of semiconductor revenue in the coming fiscal year, according to a new survey and analysis issued by KPMG.

The accounting firm noted that semiconductor makers had shifted their organisational structures in response to those trends, with 53 per cent of respondents reporting that they had increased their focus on specific operational requirements for hot applications — and away from general-use chipsets that can be used in multiple products.

"Indeed, the top challenge in terms of developing products and taking them to market, as cited by 30 per cent of respondents, is the fact that customers are requiring more complex solutions," the report said.

The industry views sensors and micro-electric mechanical systems as the hottest growth category for its products, according to KPMG, with microprocessors in second place and analog/RF chips in third. The continued strong growth in sensor/MEMS (micro-electro-mechanical systems) demand is being driven in large part by the growth of IoT deployments, which tend to require lots of sensors.

The top source of demand, however, was wireless communications, as 5G rollouts in the US and elsewhere continue at a rapid pace. 5G deployments require denser placement of base stations, meaning that more silicon is needed to service a given geographical area. Hence, it's easy to see how 5G has bolstered semiconductor demand.

Talent retention a top priority for chip makers

Unsurprisingly, given the continued supply problems that have plagued the industry, well over half of respondents said that the supply chain is a top strategic priority — but more surprising is the fact that it's not the most common response. Instead, fully 77 per cent of companies surveyed said that talent retention was among their top priorities, compared to 60 per cent who said the same about supply issues.

"The industry has been dealing with a talent shortage for several years, as non-semiconductor companies started developing their own chips and silicon capabilities," the report stated.

Part of the reason that talent is such a high priority, according to KPMG, is simple math — when nearly nine in 10 semiconductor companies expect to grow their workforce in the next 12 months, and roughly a third expecting to do so by a factor of 10 per cent or more, it's difficult to know where these new semiconductor workers are going to come from.

"In this environment, companies would do well to think seriously about up-skilling and re-skilling existing workers, initiating apprenticeship programs, and partnering with colleges and universities to increase the number of graduates with relevant technology degrees," the report's authors said.


Tags kpmg

Show Comments