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LATEST THINKING


OVERVIEW

Over the last 20 years, the semiconductor industry has been at the center of rapid technology advances—from the PC boom to smartphones and now the IoT and driverless cars. But, have industry players themselves been successful in leading in the new?

Our analysis suggests that many semiconductor businesses need to forge new strategies to develop their core business, while innovating for their future.

 

KEY FINDINGS

We examined the industry through the lenses of financial performance and innovation prowess. Our analysis revealed four key types of businesses in the sector.

 

Our research shows that only 31% of companies are utilizing their investment capacity to fuel growth


Pivot intensity: Investment Capacity vs. Investment Velocity
Pivot intensity: Investment Capacity vs. Investment Velocity

Cautious investment strategy, but high investment capacity with option to explore new opportunities

Cautious investment strategy, with limited investment capacity to explore new opportunities; need to rebuild profitability first

Aggressive investment strategy, with high investment capacity providing more future options

Aggressive investment strategy, but low investment capacity, limiting future options

Pivot intensity: Investment Capacity vs. Investment Velocity
(Sample: n=36 companies in the semiconductor industry)

DEVELOP A NEW STRATEGY

Semiconductor businesses that want to lead in the new, will need to develop a strategy to take them to the next phase of innovation and growth.

 

These are the three strategic imperatives that enable companies to rotate to the new:

An organization must increase efficiency and maximize profits from its core business to build investment capacity.

Transform the
core business.

An organization must increase efficiency and maximize profits from its core business to build investment capacity.

Rather than spending all of the new profits on the new business, the company must dedicate a portion to driving incremental growth in the core business.

Invest for core
business growth.

Rather than spending all of the new profits on the new business, the company must dedicate a portion to driving incremental growth in the core business.

This requires investing the balance of investment capital in creating an innovation architecture that enables the new business to make the transition from concept to mass market.

Scale the
new business.

This requires investing the balance of investment capital in creating an innovation architecture that enables the new business to make the transition from concept to mass market.

CONTACT US

Syed Alam

Syed Alam

Managing Director
Global Lead, Semiconductor Practice

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