SAN FRANCISCO—The semiconductor industry appears to be gathering steam as 2016 comes to a close, but many chip company executives appear to be pessimistic about the prospects for the next few years, according to a recent survey by consulting firm KPMG LLP.
Nearly half of the 153 semiconductor industry executives to participate in KPMG’s 2017 Global Semiconductor Industry Outlook survey said they believe their industry is in a late expansion phase and another 20% think the industry is currently at an inflection point from expansion to contraction.
Only about half of the executives served expect revenue to grow and R&D spending to increase over the next three years, according to a summary of the results offered by KPMG. By contrast, the majority of respondents to last year’s survey expected revenue and R&D to grow over the three-year outlook, KPMG said.
According to Lincoln Clark, KPMG global semiconductor industry leader, such pessimism about immediate revenue and R&D growth is a sign of a maturing industry. Lower industry growth rates may be the theme over the next several years, Clark said.
The survey results were released earlier this month. Since then, there has emerged evidence that semiconductor sales are growing faster than expected as 2016 winds down, raising the prospect that overall 2016 sales may be flat for the year. Earlier in the year most of the forecasts called for sales to decline in 2016.
Respondents to the KPMG survey said average sales price erosion is the top issue facing the industry over the next three years. The need to identify into new business areas was identified as the top priority.
“The focus on diversification means that to successfully capitalize on future growth trends, companies must invest their R&D funds wisely and efficiently,” Clark said. “Yet, this appears to be a challenge for some semiconductor companies.”
—Dylan McGrath covers the semiconductor industry for EE Times.