A report from Capgemini highlights how geopolitical tensions, trade restrictions, and the push for technology sovereignty are affecting the semiconductor industry’s confidence. Nations are vying for control over essential technologies and resources, causing ongoing strain in the global semiconductor supply chain. Trade disputes and export restrictions have disrupted the flow of components and finished products. For example, Capgemini warns that 14 consumer supply networks dependent on TSMC could face serious disruptions if military tensions escalate between China and Taiwan. Additionally, poor US-China relations have led to bans on specific products and tighter controls.
In a survey of 250 semiconductor firms and 800 downstream organizations, Capgemini found that 58% of semiconductor companies expect a rise in demand for neural processing units as generative AI (GenAI) gains traction. Moreover, 57% of chip manufacturers foresee an increased need for high-performance chips, while 56% expect a greater demand for memory-intensive chips. This suggests a notable shift toward advanced processing.
The demand is rising for custom chips and software tailored to optimize their performance. Jiani Zhang, Capgemini Engineering’s executive vice-president and chief software officer, emphasized the importance of advanced platforms and software in the semiconductor field. She noted that as AI, IoT, and edge computing become more complex, integrating specialized software with hardware accelerators will set industry leaders apart.
To remain competitive, semiconductor companies need to focus on co-optimization across all levels, from chip architecture to application interfaces. Capgemini anticipates that over the next year, the need for AI chips, custom silicon, and memory-intensive chips will keep growing. The industry should seize emerging opportunities in design, innovative, sustainable fabrication methods, and domestic sourcing to bolster stability.
Brett Bonthron, global high-tech industry leader at Capgemini, pointed out that GenAI is creating significant demand for chips. He urged semiconductor businesses to view this as a chance to boost production while adopting a ‘chip-to-industry’ strategy that emphasizes a full-stack, software-first approach. Investment in advanced fabrication and design driven by AI and GenAI is crucial to meet the unique needs of new applications. Additionally, the industry must continue to enhance sustainable manufacturing processes and implement robust security measures to protect intellectual property.