From lower average selling prices and slowing revenue growth to an increasingly turbulent M&A environment, a number of factors have contributed to the seismic shift that hardware systems and semiconductor manufacturing companies are going through today. To adapt to the change and stay competitive, hardware companies are seeking new and more effective ways to manage market volatility and innovate at the speed of Moore’s Law.
Attracted by potential for high profits, many hardware and semiconductor manufacturing companies are investing in their software development capabilities. For instance, Nividia Corporation, which is recognized for designing cutting-edge graphics processing units, recently developed deep-learning software to increase the sales of its existing hardware products.
While a shift from hardware to software promises lucrative rewards, companies must develop a comprehensive action plan to tackle the difficulties that may arise at a later stage. Given that many semiconductor manufacturing companies have traditionally focused on hardware only, they need to develop a foolproof strategy that’s based on the findings of a comprehensive audit of the competitive landscape to ensure successful transition from hardware to software.
The quest to improve profit margins has resulted in a major re-alignment of the hardware and semiconductor manufacturing industry. Many companies are partnering with players across the value chain to co-develop value-adding hardware and software solutions in order to accelerate the innovation process, while keeping the development costs low.
Apart from slowing demand resulting from rise of mobile ecosystems and consumerization of technology, hardware and semiconductor manufacturing companies are also face increasing competition from system-level players like Apple and Samsung. The two companies that lead as the top global semiconductor customers[1] have reached down the stack, playing a greater role in chip design.
While the challenges faced by the hardware and semiconductors industry are monumental in scope, the overall industry outlook remains positive. From the incorporation of highly sophisticated electronics in connected cars and connected devices to the advent of more advanced monitoring equipment, new applications of semiconductors are being explored every day.
This presents hardware and semiconductor manufacturing companies with unique opportunities to increase their market share and profit margins. However, to grasp the opportunity and cope with challenges, companies should hire the right talent that’s capable of anticipating potential long-and short-term risks and developing a winning strategy to maximum growth and profitability.
At Allen Austin, we leverage our deep expertise and extensive experience of executive search and leadership development to help hardware and semiconductor manufacturing companies address their talent recruitment and retention challenges. Our experts adopt a methodical approach towards executive search, taking their time to understand the impact of technology disruptions on the client’s business. Based on this understanding, we help clients connect with top global talent that’s capable of taking their company to new heights.
[1] Gartner Says Samsung and Apple Continued to Lead as Top Global Semiconductor Customers in 2016 http://www.gartner.com/newsroom/id/3591317
