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Semiconductors: Can the surge continue?

Semiconductors: Can the surge continue?

Electric performance in 2017 powers tempered optimism for 2018.

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Semiconductors: can the surge continue?

The year 2017 surprised everyone. It was exceptional for the semiconductor industry—more than anyone expected. High-voltage revenue gains among the biggest semiconductor players led to record-breaking industrywide performance. How will semiconductor companies follow such remarkable performance in 2018? How can semiconductor executives flip the right switches to turn an unexpected spike into a prolonged surge of steady, upward growth?

For KPMG’s annual global semiconductor outlook, we surveyed executive-level insiders about their perspectives and expectations following this banner year. We asked them about what sectors, products, and geographies will drive demand; what forces will impact their strategies; and what parts of their internal businesses they will invest in or transform. We found that while most semiconductor executives recognize it will be nearly impossible to sustain such massive growth over the long-term, optimism exists about 2018.

The majority of semiconductor leaders said they expect their companies—and the industry as a whole—to increase revenue, largely driven by diversification into revolutionary new technology segments, such as artificial intelligence (AI), the internet of things (IoT), and autonomous vehicles. Most executives expect profitability to increase alongside revenue, as companies obtain revenue from new markets and rationalize costs in research and development (R&D). Companies also plan to increase investment in their workforce and equipment.

Leveraging findings from our survey data and insightful analysis from KPMG’s semiconductor practice leaders, this report sheds light on noteworthy industry trends, emerging issues to watch out for, and key areas of opportunity for global semiconductor companies.

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