Small Business Insights

Challenges Facing the Semiconductor Industry

It’s been a challenging year for the semiconductor industry as a whole, with a couple of major factors shaping the market outlook for both the short and long term. Here we take a look at some of the challenges facing the industry, as well as some areas where growth is still possible, and why companies need to focus on filling their lead funnels as much as ever.

State of the Market

The semiconductor industry, like so many others, has seen its fair share of changes in 2020. Unsurprisingly, some of the biggest are due to the repercussions of the COVID-19 pandemic. According to McKinsey, companies are having difficulty making strategic decisions with so much uncertainty, including when it comes to their marketing. Negative year-over-year growth is expected for 2020. The same report concludes that the situation will improve in 2021 as most end markets recover, although only a few segments are expected to meet pre-pandemic expectations for growth.

On top of the ongoing tensions between the U.S. and telecom giant Huawei have also impacted the industry. Forbes describes the situation as the “looming semiconductor cold war”. Back in May, it was reported that Taiwan Semiconductor Manufacturing Co. is discussing opening up plants in the United States, which could change things even more drastically along the global supply chain.

Growth in Developing Applications

These changes are causing demand to rise for certain applications, both existing and emerging. In the same article above, McKinsey reports that wired communication may have a lot of potential for future growth with remote work and remote learning likely to continue in many places across the globe for the foreseeable future.

The pandemic has also brought new demand in the realm of artificial intelligence, particularly in education and healthcare. AI tutors and adaptive learning platforms could help provide students with tailored, one-on-one learning while schools switch to virtual or hybrid classrooms for the upcoming school year.

In healthcare, the changes brought on by the pandemic are likely just the beginning. AI is powering a revolution in how different aspects of healthcare are delivered, covering everything from disease diagnosis to robotic delivery systems in hospitals. The technology is also being used in some areas of the world for contact tracing and alerting.

We know that these technology developments are just another sign of the widespread changes that are occurring across the entire semiconductor industry. There are still a lot of unknowns in play as we near Q4, but there are signs of positivity, too, as technology advances and adapts to new demand in these sectors.

Finding Stability

With so much uncertainty in the semiconductor market, many companies just can’t afford any missteps when it comes to their marketing initiatives. At AAC, we understand the struggle of trying to fill your lead funnel, keep your prospects engaged and ensure you’re still closing deals.

As a long-time partner of several companies along the semiconductor supply chain, we know what it takes to generate leads and enable sales with qualified marketing efforts in this space. We can help support you if you’re looking to find some stability for your own organization. Even if you’re faced with tighter budget constraints or you’ve been impacted at all by the changes this year, we can help you develop a marketing strategy that fits your needs and still works for you.

If you think you can be getting more out of your marketing – or if you simply need more out of it – AAC is here to help.

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