Automotive and AI Driving Revenue Growth in the Semiconductor Industry

The Power of Automotive

Semiconductor industry executives recognize the automotive sector as the primary revenue driver, according to the KPMG Global Semiconductor Outlook report. Surveying 172 chip executives, the report reveals that for the second consecutive year, automotive leads the way in chip revenue. The increasing computerization and electrification of vehicles continue to fuel the demand for semiconductors in this sector.

“The automotive sector retains its pole position for the second consecutive year, solidifying its status as the primary revenue driver for the semiconductor industry.”


Rising Importance of AI

While automotive takes the top spot, artificial intelligence (AI) is rapidly catching up. The survey results show that AI has ascended dramatically, securing the second spot as a crucial revenue generator. This significant shift in industry dynamics marks the meteoric rise of AI’s importance in the semiconductor industry.

“Microprocessors, particularly those used for AI, have emerged as the prime product opportunity for future industry growth.”


Executives in the semiconductor industry predict robust growth overall, with 85% forecasting revenue expansion in the near term. Although projections for rapid revenue growth above 10% have slightly decreased, the optimism remains high. The report also highlights the strategic priorities for semiconductor companies, which include talent development and retention, supply chain resilience, and the implementation of generative AI over the next three years.

Talent Acquisition and Development

Recognizing the escalating demand for technical expertise, semiconductor firms are prioritizing talent development and retention. In response to the increasing competition for talent from non-traditional semiconductor players, industry leaders are forming university partnerships and embracing remote/hybrid work setups.

Inventory Management Strategies

While concerns about semiconductor inventory surplus are mounting, 19% of executives anticipate sustained demand driven by emerging technologies like AI. This suggests a belief in continuous growth and the absence of inventory excess over the next four years. The report emphasizes the need for effective inventory management strategies to address the rising excess production capacity in the industry.

Looking ahead, the Global Semiconductor Industry Outlook report, scheduled for release in early 2024, will provide further insights into these findings and their implications for the semiconductor landscape. It is evident that the dominance of the automotive sector in chip revenue is now facing a formidable challenger in AI, resulting in a transformative shift in industry dynamics.

“The survey findings illuminate a landscape where automotive dominance in semiconductor revenue faces a formidable challenger in AI, signaling a transformative shift in industry dynamics.”


As the semiconductor industry continues to evolve in a fast-paced technological environment, talent acquisition and development, as well as effective inventory management strategies, remain pivotal for sustained growth and success.

“Talent acquisition and development remain pivotal, as does the need to navigate inventory challenges in a fast-evolving technological environment.”


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