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AI is market driver in GSA’s 2024 outlook survey

AI is market driver in GSA’s 2024 outlook survey

Business news |
By Peter Clarke



Artificial Intelligence has jumped up the rankings as an important sector driving semiconductor sales, according to an outlook survey conducted for the Global Semiconductor Alliance by KPMG LLP.

The 19th annual global semiconductor industry survey was conducted in 4Q23 and asked 172 semiconductor executives about their outlook for the industry in 2024 and beyond. More than half of the respondents were from companies with more than US$1 billion in annual revenue.

Lacking confidence

The industry confidence score was 54 for the coming year, down from 56 in the previous survey (a value above 50 indicates a more positive outlook than negative).

Despite strong semiconductor market growth being tipped for 2024 (see Global chip market to surge 20 percent in 2024, says IDC) these executives are less confident than at any time in the last six years, possibly unsettled about the amount of geopolitical and economic turmoil in the world. Other matters executives mentioned included problems finding low-cost employees and the increasing cost of R&D and capital equipment. Some 51 percent of executives said their company already has, or in the next year plans to, postpone capital expenditures.

Nonetheless more than 8 in 10 (83 percent) project their company’s revenue will grow over the coming year, up from 81 percent. But only 4 in 10 of those surveyed expected revenue growth of more than 10 percent.

Automotive is expected to be the most important revenue driver in 2024, a position it retains from 2023. However, after placing fourth in the two previous surveys AI jumped to second-ranked. Cloud/data centers tied for third place with wireless communications.    

As a result, processors, including GPUs used for AI, ranked as the top product for revenue growth in 2024. And the implementation of generative AI ranked among the top three priorities for semiconductor companies over the next three years. It trailed behind staff development and retention and supply chain resiliency.

Oversupplied or not

Some 30 percent of the respondents in this year’s survey believe there is already an excess of semiconductor inventory driven in part by lower customer demand. At the same time a significant minority of the respondents believe that emerging technologies, such as AI, are an engine for continual growth. 

Almost one in five (19 percent) of the executives believe demand will keep increasing and that demand will exceed supply for the next four years. The number of people holding this view doubled compared with last year’s survey (9 percent).  

Related links and articles:

www.kpmg.com

www.gsaglobal.org

News articles:

Chip market rebound points to 16 percent growth in 2024

Global chip market to surge 20 percent in 2024, says IDC

Semiconductor market has turned the corner, says analyst

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