KPMG released The right to winin semiconductors in late June, analyzing the impact of factors such as the current slow profit growth, increasing R&D costs, and the continuation of Moore's Law in the semiconductor industry. The report believes that in the current environment, semiconductor companies should optimize and focus their R&D investments so that they can be consistent with end-user needs. The report believes that through strict investment planning and product management, R&D efficiency can be achieved and the company can win the "right to win." Mergers and acquisitions also play an important role in a company's R&D management. If used properly, mergers and acquisitions are also a complementary component of a company's investment portfolio management.
KPMG's report believes that Moore's Law is still valid, but its impact will take longer to be realized. This elongation of the time frame has led to significant changes in semiconductor companies.
One of the most obvious changes is the merger behavior. Part of the reason for the consolidation of semiconductor companies is rising R&D and manufacturing costs, as well as slower and slower profit growth. This consolidation is increasingly concentrating profits and the ability to earn them at the top of the semiconductor industry. In the Global Semiconductor Outlook Survey conducted by KPMG, two-thirds of the respondents listed the purchase of intellectual property, the exploration of technical talents, and rising R&D and manufacturing costs as key drivers of mergers and acquisitions. Semiconductor companies are increasingly inclined to acquire intellectual property, reflecting the rising cost of internal innovation and the difficulty of obtaining reasonable returns from a complete technology product portfolio.
When companies make in-house/acquisition decisions when faced with innovative technologies, most respondents believe that acquiring technologies under development can yield greater returns than conducting independent research and development. In order to maintain their market position, companies need to increase the R&D/revenue ratio, which also increases investors' expectations for return on R&D investment. This has prompted semiconductor companies to rethink their investment strategies and find ways to improve R&D efficiency.
In product development and portfolio management, decision makers need to comprehensively consider mergers and acquisitions as well as R&D investment to achieve product differentiation and win the "right to win" in the market.
In addition, when deciding how and where to invest, companies must develop a product roadmap and strictly implement it. Only in this way can they maintain market share. Without strict discipline, blindly pursuing multiple opportunities, or insisting on "imitation" of existing products, it will cause delays in key plans, which will then snowball to affect subsequent generations of products. The consequence is the loss of market share, and The decline in product prices will in turn affect future R&D investment.
