Power utilization has always been a critical obstacle in the semiconductor and electronics industry. The industry is rapidly adopting miniaturization for better operational efficiency, and the overall chip size has shrunk. Chip density has also reduced with around millions of gates on one single chip, which has created in power scattering issues.Power utilization and heat generation have been prominent hurdles right from the start of the semiconductor and electronics era, thereby shifting the industry away from the path of Moore’s law. This all-time challenge was and is still one of the major roadblocks that restrain; the growth of the sector, for instance, high power and heat concerns are obstructing the path towards the development of augmented reality glasses.
Some of the suggested factors for tackling this issue includeeither an intense focus on faster CPUs with major tasks managed by software or consider it a system problem and develop a specialized solution to take the industry growth to newer heights. New entrances of various start-ups such as Cerebral Systems, Mythic, and Syntiant falls under the category of developing a specialized solution for these heat spillage problems. Still, there may be limits to just how much specialization can help.
The semiconductor industry has experienced enormous growth, reaching a value of USD 450 billion in 2019. Major propelling trends and technologies behind this growth include the Internet of Things (IoT), artificial intelligence (AI), wireless, and mobile technologies, and various others. However, besides this impressive growth, the industry faces some acute challenges in terms of the shortage of skills and talent.
The widening talent gap is a global concern, and key semiconductor hubs face talent shortages of varied proportions. For example, Singapore is attempting to address talent shortages in the specialized fields of electronics and electrical engineering manufacturing, the semiconductor industry’s building blocks. China, which accounts for 50% of global chip demand, needs 400,000 more semiconductor employees to meet its growth ambitions to develop domestic semiconductor manufacturing.
The widespread adoption of semiconductors and electronic components is the foremost factor that drives industry growth.
IoT technology is expected to be a game-changer for the semiconductor industry. ‘Smart’ technologies and concepts have gained immense popularity, such as smart home, smart city, and Industry 4.0, which has propelled the demand for IoTtechnologies and, in turn, semiconductor chips and ICs. To capitalize on the opportunity and gain higher profit margins and long-term growth, players in the industry must redefine their application, sales, and product development strategies.
Today, digitalization has gained roots in almost every commercial sector. It primarily refers to the transition from a conventional structured system to an open cloud-based system that merges data from multiple sources. The growing adoption of digital supply network technologies is expected to bolster the growth of the semiconductor industry. The trend can help semiconductor manufacturers solvecommon problems,such as limited information transparency across the manufacturing and supply chain.
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The demand for miniaturized electronics is growing as companies across industries are looking for innovative ways to provide energy-efficient devices that accelerate manufacturing. This creates ample opportunity for OEMs and service providers of semiconductor companies to focus on sensors, regulators, electric motors and drives, manufacturing control and execution systems, and robotics. Our research expertise helps companies in these business areas capitalize on the potential venture avenues and address the requirements associated with diversified value chains, surging complex automation systems, and the increased focus on software.
As an example of our work, we helped a leading company that manufactures semiconductor products to resolve project complexity in improving its cost-competitiveness and cutting development time by 30%. In another case, one of our clients, a leading player in the electronics sector, approached us to examine market dynamics, technological advancements, and supply chains. Our solution covered a detailed analysis of key players and their distribution channels and various technical measures, which helped the company adopt a suitable future growth strategy.
China accounted for over 50% of global semiconductor consumption in 2019. In 2020, the total consumption in China is projected to be $231 billion, with more than $190 billion generated through export activities. Disruption in China will likely have a significant impact on companies across the globe and hamper the electronics industry value chain.
Although the impact of COVID-19 has subsided with moderate to complete reopening of worldwide economies, the impact across the electronics value chain, from materials to final products, will likely be far-reaching and impactful for parties involved in semiconductor manufacturing. COVID-19 has highlighted the potential risks and vulnerability of the current day’s electronics and semiconductor value chain model and has posed questions for the semiconductor industry to reassess its global supply chain model. COVID-19 might become the black swan event that forces the electronics and semiconductor industry to transform its global supply chain model.
Strategies that manufacturers are adopting to mitigate risks
Growth forecast through downstream activities
PCs segment: The PCs segment possibly witnessed substantial growth in the 1st half of 2020. However, most people would have procured all the home-office electronics that they need for remote work in 2020, lowering demand for next year. Meanwhile, enterprises may continue to delay investments in PCs to control expenditures and focus on overcoming losses sustained in 2020.
Automotive: As per current estimates, the automotive industry is likely to witness a y-o-y growth of around 30% in 2021 which will drive the demand for automotive electronics components.
Wired communications: The pace of growth in this segment could exceed pre-COVID-19 forecasts during 2020-2021 as a delayed recovery in this sector would lead to higher growth than an earlier predicted optimistic scenario. Sustained remote working and homeschooling will continue to stimulate the demand for efficient communication networks.