Semiconductor Leaders Say The Internet Of Things Is Poised To Propel Industry In 2019: KPMG Study

SANTA CLARA, Calif., April 2, 2019 /PRNewswire/ -- Leaders of semiconductor companies globally ranked Internet of Things (IoT) – the technology powering smart appliances, wearable devices and "smart cities" – as the most important application driving semiconductor revenue over the next year. IoT is expected to supplant wireless communications, last year's leader, as the key revenue driver, according to the KPMG 2019 Global Semiconductor Industry Outlook from audit, tax and advisory services leader KPMG LLP, in collaboration with the Global Semiconductor Alliance.

Read the full report here - https://home.kpmg/us/en/home/insights/2019/03/semiconductors-the-backbone-of-the-connected-world.html

"Smaller firms are increasingly the source of many promising developments in the semiconductor industry. They are particularly vested in capitalizing on IoT and Artificial Intelligence (AI)," said Lincoln Clark, KPMG Global Semiconductor Industry Leader. "Our survey also found that demands for talent to support the innovation were seen as the greatest overall threat to meeting future growth. This talent risk was particularly prominent in smaller companies, while larger companies were also equally concerned about being disrupted by emerging technologies."

About two-thirds of the 149 semiconductor industry leaders surveyed named IoT – which has applications in virtually all industries – as the most important application driving semiconductor revenue over the next year. International Data Corp. (IDC) forecasts worldwide technology spending on IoT to increase from $745 billion this year to $1.2 trillion in 2022. Wireless communications was seen as the leading revenue driver by 60 percent of respondents, and AI/cognitive/deep learning increased significantly to 56 percent, an increase from 43 percent the prior year.

AI spurs chip innovation
As AI continues on its path to transform the world, semiconductor manufacturers have an enormous opportunity. "If IoT and 5G will enable the connected world, then AI will make sense of it," said Clark. "AI  is beginning to drive a more significant share of the semiconductor revenue stream as respondents ranked AI as the third most important application driving revenue; a significant jump from last year's results when AI ranked tenth."

5G marks a new dawn
5G is expected to change the face of wireless communications. As the key component of a connected world, wireless communications will continue to be a key revenue driver for semiconductor companies.

"We see more concentrated local area, campus-type deployment as the first wave of 5G," said Tim Zanni, KPMG Global and U.S. Technology Leader. "This will enable use cases to be tested and new business models to be refined."

Another key finding is that the U.S. and China are expected to remain the top revenue-generating markets over the next three years. "Notwithstanding current trade actions, China's electronics and telecommunications markets – a leading consumer of semiconductors – are still seen as a big buyer, and non-Chinese chipmakers are optimistic about continuing to sell to those markets in the foreseeable future," said Clark.

About the KPMG Global Semiconductor Industry Outlook
The annual KPMG Global Semiconductor Industry Outlook highlights the findings from 149 senior executives from global semiconductor companies. KPMG completed the online survey in collaboration with the Global Semiconductor Alliance (GSA) in the fourth quarter of 2018.

About KPMG
KPMG LLP is the independent U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's independent member firms have 207,000 professionals in 153 countries and territories. Learn more at www.kpmg.com/us.

About Global Semiconductor Alliance (GSA)
GSA is where leaders meet to establish an efficient, profitable, and sustainable semiconductor and high technology global ecosystems encompassing semiconductors, software, solutions, systems, and services. Learn more at www.gsagobal.org.

SOURCE KPMG LLP

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