KPMG: 56% of chip leaders expect the deficit to persist in 2023

About 56% of semiconductor industry leaders expect the chip shortage plaguing us during the pandemic to last through 2023, according to KPMG.

Because of this expectation, confidence in growing global semiconductor revenues is, of course, at an all-time high. Ninety-five percent of respondents said they think their company’s revenue will grow in the coming year, with 34% expecting growth of 20% or more.

The shortage is shaking up the entire economy, driving up prices for electronic goods and making high-end equipment like graphics cards and PlayStation 5’s a scarce commodity. Despite ongoing supply chain challenges, financial and operational confidence for semiconductor executives has risen to an all-time high, according to the KPMG Global Semiconductor Industry Outlook 2022 from KPMG and the Global Semiconductor Alliance. The 17th annual survey includes insights from more than 150 semiconductor executives worldwide.

About 42% of chip managers believe the shortage will end in 2022. US respondents view 2023 as the most likely year,
65% say the imbalance between supply and demand will increase next year.

Nearly 9 in 10 respondents believe their global workforce will grow in 2022 – an increase of nearly 40% from last year’s outlook. This is why Intel CEO Pat Gelsinger is confident to spend anywhere from $20 billion to $100 billion on chip factories in the US — as long as a subsidy bill passes Congress. It is also the reason why inflation is rising.

“While supply chain and talent headwinds certainly remain, the semiconductor industry is expected to deliver record revenues of more than $600 billion by 2022,” Lincoln Clark, the partner responsible for KPMG’s global semiconductor practice, said in a statement. . “As economic pressures ease, confidence in the sector’s growth potential is likely to continue to increase in the coming years.”

Looking ahead, wireless communications, including 5G infrastructure, smartphones and other mobile devices, is
considered by far the most important source of income.

Respondents expect the automotive sector to become the second most important revenue driver in the coming fiscal year.

The Internet of Things (IoT), which was recently considered the No. 1 revenue engine, has fallen to No. 3, behind
wireless communications and automotive.

Confidence remains high for the growth of the car market. However, the sector is also expected to continue to face supply chain blockages, with some forecasting that the wholesale automotive market will not return to pre-COVID-19, pre-chip shortage levels until 2025. to stay, KPMG estimates that 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 rapidly digitizing global economy,” said Scott Jones, director of KPMG’s Global Semiconductor practice. “Continued demand has renewed focus on the industry and we expect substantial domestic growth and M&A activity as a result in the coming years.”

According to the report, talent development and retention remains the top strategic priority for industry decision-makers. When asked about the impact of several tech giants investing further in their own silicon capabilities, respondents cited talent attracted to these giants as their top concern.

Overall, however, only 19% of respondents view non-traditional chip developers as a serious threat to competition.

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