Changes in the Semiconductor Industry?
Many of our clients here at Caliber Networks have been asking about the rumored semiconductor shortage and inquiring as to how it might impact the future of their businesses? While the COVID-19 pandemic did indeed disrupt some semiconductor production and distribution, the complex challenges faced by the industry date back much further than that. To fully understand the catalysts for industry change, and the implications of those changes throughout the whole technology sector, one must look at the entire scope and history of semiconductors themselves.
Many different markets that rely on semiconductors for their products and services have been scrambling for the past several years to obtain these crucial components. As is common knowledge, there were indeed supply chain disruptions and shipping delays during the height of the COVID-19 lockdowns, but the difficulty in obtaining semiconductors will likely continue beyond the pandemic largely in part due to fast-paced technological changes and the desire by the industry’s leading sales and advertising teams to pursue new, profitable, markets on the cutting edge of technology. According to a 2021 survey of 40 executives done by the Global Semiconductor Alliance (GSA), the sales and advertising branches of these companies are putting a great deal of time, energy, and resources into 5G, lotT products and services, edge computing, and artificial intelligence (AI). The reason semiconductor production companies have switched to having such a heavy focus in these areas is that they want to, and indeed must, remain technologically competitive.
Changes on the Horizon
The Semiconductor Transformation Study done this year revealed other changes coming to the industry that are impacting the shortage as well. For example, many companies are moving away from the traditional single-product semiconductor sales models that were used in the past, and instead, are using the idea of a “bundle” service to combine products and services. Because semiconductor producers have overlooked and underinvested in important production methods like automation, they can’t always keep up with the demand. These “bundled” items have increasing effects on how companies choose to market, create, and distribute their products. In addition, purchasing a semi-conductor for a processor is a one-time experience, but when companies choose to focus their time and energy on engineering and using chips in AI for example, those chips get to be used again and again. Companies are working on being able to provide an analysis of any data that passes temporarily through a chip which can be extremely helpful for an enormous variety of sectors. Think about the lifesaving power of evaluating the data coming through the chip to determine if a hospitalized patient's medical device is properly calibrated or using a real-time analysis of data stored in the chips of factory machinery to improve production? It’s easy to see why this kind of investment is appealing to the whole semiconductor industry.
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