14 Mar Automotive most important growth driver for Semiconductor industry
The most important growth driver for semiconductors is on wheels.
As reported in Manufacturing Asia, the industry portal serving Asia’s manufacturing landscape, the 2023 KPMG Global Semiconductor Industry Outlook report found that the automotive industry is the top application driving semiconductor companies’ revenue streams. This is thanks to the electrification and increased autonomous features of new vehicles.
Additionally, the research by KPMG estimates that automotive semiconductor revenue will reach $200b annually by the mid-2030s and surpass $250b by 2040. What is perculiar is that this is the first time that the automotive sector is considered the most important growth driver among other applications by a significant margin.
Key reasons behind this are growing availability of electric vehicles (EV) and recent legislation pushing for long-term electric vehicle production in Europe and Canada. In 2023, the most important growth products for the semiconductor industry are key components of EVs such as sensors.
With this growth in the industry, there is a need to ensure the consistent supply of chips, especially in case of a shortage. Manufacturers from high-growth sectors have recognised this need and are building more direct relationships with chip companies. Such partnerships involve longer term commitments and more hands-on approaches. Thus, chip companies are reorganising themselves around these new partnerships, helping them better manage their costs and risks.
As fast-growing and established firms continue to capitalize on market opportunities, reach out to our Senior Consultants on hiring top talents to lead the growth of your business.