Financial and Operational Confidence Reaches All Time High for Global Semiconductor Execs Despite Supply Chain Headwinds

— U.S. execs believe chip shortage will persist into 2023 — Automotive sector emerges to second most important revenue driver

Financial and operational confidence surges to an industry all-time high.

Despite persistent supply chain challenges, financial and operational confidence has surged to an all-time high for semiconductor executives according to the 2022 KPMG Global Semiconductor Industry Outlook from KPMG and the Global Semiconductor Alliance.


The 17th annual survey features insights from more than 150 global semiconductor executives about the future of the industry landscape. The survey was conducted in the fourth quarter of 2021 by KPMG and the Global Semiconductor Alliance (GSA).

 

Key findings include:

  • Ninety-five percent of respondents said they believe revenue at their companies will grow over the coming year, with more than one-third (34%) expecting growth of more than 20%.
  • Fifty-six percent of respondents believe the ongoing chip shortage won’t end until sometime in 2023, while 42% think it will end in 2022. U.S. respondents view 2023 as the most likely year, with 65% saying the supply/demand imbalance is going to push into next year.
  • Nearly 9 in 10 respondents believe their global workforce will grow in 2022—an increase of nearly 40% over last year’s outlook.


“While supply chain and talent headwinds certainly remain, the semiconductor industry is expected to deliver all-time high revenues of more than $600 billion in 2022,” said Lincoln Clark, partner in charge of KPMG’s Global Semiconductor practice. “As economic pressures recede, confidence in the industry’s growth potential is likely to continue to increase over the next several years.”


Future Growth:

  • Wireless communications, including 5G infrastructure, smartphones and other mobile devices, is considered by far the most important revenue driver.
  • Respondents expect the automotive sector to emerge as the second most important revenue driver over the next fiscal year.
  • IoT, recently considered the number one revenue driver, has fallen to number three, behind wireless communications and automotive.


Confidence remains high for the automotive market’s growth. However, the sector is also projected to continue to face supply chain logjams, with some projections saying the wholesale car market will not return to pre-COVID-19, pre-chip shortage levels until at least 2025. While short-term pressures are likely to remain, KPMG estimates the automotive semiconductor market will reach more than $200 billion over the next two decades.


“The semiconductor industry has emerged as arguably the most critical component of our connected global economy,” said Scott Jones, a principal in KPMG’s Global Semiconductor practice. “Persistent demand has renewed focus on the industry, and we expect to see substantial domestic growth and M&A activity as a result over the next several years.”


According to the report, talent development and retention remains the top strategic priority for industry decision makers. When asked about the impact of various tech giants investing further in their own silicon capacities, respondents cited talent being attracted by these giants as their main concern. However, overall, only 19% of respondents view nontraditional chip developers emerging as serious competitive threats.


For the full report, please click here.  

About KPMG LLP

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About Global Semiconductor Alliance (GSA)

GSA is Where Leaders Meet to establish an efficient, profitable, and sustainable high-tech global ecosystem encompassing semiconductors, software, solutions, systems, and services. A leading industry organization that represents more than 30 countries and 300 corporate members, including 100 public companies, GSA provides a unique, neutral platform for collaboration, where global executives interface and innovate with peers, partners, and customers to accelerate industry growth and maximize return on invested and intellectual capital. Members of the GSA represent 70 percent of the $550B+ semiconductor industry and continue to grow. Learn more at www.gsagobal.org.

Contact

Alison Wentley
KPMG LLP
561-568-5545
awentley@kpmg.com