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Every industry will be tech driven – can India ride this next wave

The semiconductor industry was in the headlines over the last two years as supply shortages led to bottlenecks in the production of everything from cars to cameras. This highlights how tiny chips are critical to the smooth functioning of the global economy.

The future appears brighter:

According to KPMG’s Semiconductor Outlook 2023, sixty-five percent of the executives surveyed think the semiconductor supply shortage will ease in 2023, and 15 percent believe that supply and demand are already in balance for most products. Only 20 percent think the shortage will last into 2024 or later.

Semiconductors everywhere: In many ways, every industry is a technology industry, and semiconductors are taking the center stage. The semiconductor industry is driving innovation and efficiency in the digitized and connected world. Many indispensable technologies will continue to fuel growth next year, including wireless and 5G, the Internet of Things, Artificial Intelligence, and data centers.

The automotive industry tops the chart: Over the years, the automotive industry has delivered countless innovations using different types of technologies. Never before have cars used so much electronics. The speed of digitalisation of automobiles surpasses most industries. With cars now essentially becoming computers on wheels, for the first time, automotive is seen as the most important sector driving semiconductor revenue growth in the next year, followed by wireless communications. Wireless communications, long seen as the industry’s most important revenue driver, slip into second place in the 2023 outlook. Internet of Things, cloud computing, and artificial intelligence rank third, fourth, and fifth in terms of importance. In correlating research, KPMG predicts automotive semiconductor revenue will reach $200 billion annually by the mid-2030s and surpass $250 billion by 2040.

Metaverse is on the horizon but not here yet: In its first year on the survey, metaverse was ranked last (out of 10) in importance for driving semiconductor company revenue over the next year. It will be interesting to see how this view changes in the coming years as metaverse technology evolves and adoption increases.

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