1 00:00:00,000 --> 00:00:03,040 Hey everyone and welcome back for another deep dive. 2 00:00:03,040 --> 00:00:06,100 Today we're cracking open the KPMG 2024 3 00:00:06,100 --> 00:00:08,640 global semiconductor industry outlook report. 4 00:00:08,640 --> 00:00:09,920 Ooh, interesting. 5 00:00:09,920 --> 00:00:10,760 Yeah, right. 6 00:00:10,760 --> 00:00:13,760 They surveyed 172 big shot execs 7 00:00:13,760 --> 00:00:15,800 to see what they think is coming next 8 00:00:15,800 --> 00:00:17,320 for the semiconductor industry. 9 00:00:17,320 --> 00:00:19,040 So like the CEOs and whatnot. 10 00:00:19,040 --> 00:00:19,880 Exactly. 11 00:00:19,880 --> 00:00:20,960 And let me tell you, 12 00:00:20,960 --> 00:00:22,320 there's some pretty exciting stuff in here. 13 00:00:22,320 --> 00:00:25,480 We're talking major comebacks, the AI explosion. 14 00:00:25,480 --> 00:00:26,800 I've had whispers about that. 15 00:00:26,800 --> 00:00:28,480 Oh, it's more of the whispers at this point, 16 00:00:28,480 --> 00:00:29,320 I can assure you. 17 00:00:29,320 --> 00:00:31,520 And there's also this underlying challenge, 18 00:00:31,520 --> 00:00:32,960 like a hidden current, 19 00:00:32,960 --> 00:00:35,320 that's keeping those execs up at night. 20 00:00:35,320 --> 00:00:36,840 Okay, now I'm intrigued. 21 00:00:36,840 --> 00:00:38,840 Well, let's dive right in and find out. 22 00:00:38,840 --> 00:00:39,760 Sounds good to me. 23 00:00:39,760 --> 00:00:41,800 So one of the things that really jumped out at me 24 00:00:41,800 --> 00:00:44,640 from this report is just the sheer optimism. 25 00:00:44,640 --> 00:00:45,480 Really? 26 00:00:45,480 --> 00:00:47,200 Yeah, like remember last year, 27 00:00:47,200 --> 00:00:49,400 there was a lot of chatter about a possible downturn 28 00:00:49,400 --> 00:00:50,520 in the semiconductor market. 29 00:00:50,520 --> 00:00:51,360 Oh yeah, for sure. 30 00:00:51,360 --> 00:00:53,040 But now, forget about it. 31 00:00:53,040 --> 00:00:57,240 A full 85% of these execs are predicting growth in 2024. 32 00:00:57,240 --> 00:00:58,960 Wow, that's a big turnaround. 33 00:00:58,960 --> 00:00:59,800 It really is. 34 00:00:59,800 --> 00:01:01,640 They're even saying global semiconductor sales 35 00:01:01,640 --> 00:01:03,880 could hit $588 billion. 36 00:01:03,880 --> 00:01:05,520 That's a huge jump from last year. 37 00:01:05,520 --> 00:01:07,120 Absolutely massive. 38 00:01:07,120 --> 00:01:09,080 And get this, by 2030, 39 00:01:10,080 --> 00:01:11,440 they're projecting the industry 40 00:01:11,440 --> 00:01:13,720 could reach a trillion dollars in sales. 41 00:01:13,720 --> 00:01:14,960 A trillion? 42 00:01:14,960 --> 00:01:16,640 A trillion, it's wild. 43 00:01:16,640 --> 00:01:19,400 Okay, so something big must be driving all of this. 44 00:01:19,400 --> 00:01:20,360 Oh, you better believe it. 45 00:01:20,360 --> 00:01:21,200 Yeah. 46 00:01:21,200 --> 00:01:23,120 It can't just be everyone upgrading their phones, right? 47 00:01:23,120 --> 00:01:25,200 Yeah, there has to be more to it than that. 48 00:01:25,200 --> 00:01:27,680 Well, the report points to two major factors 49 00:01:27,680 --> 00:01:30,120 that are really fueling this growth. 50 00:01:30,120 --> 00:01:31,560 Artificial intelligence. 51 00:01:31,560 --> 00:01:32,840 Ah, misses. 52 00:01:32,840 --> 00:01:34,440 And the automotive industry. 53 00:01:34,440 --> 00:01:35,320 Cars still. 54 00:01:35,320 --> 00:01:37,200 I thought that chick shortage was using up. 55 00:01:37,200 --> 00:01:38,400 That's what's so interesting, 56 00:01:38,400 --> 00:01:39,560 but we'll get to that in just a second. 57 00:01:39,560 --> 00:01:40,400 Okay, I'm all ears. 58 00:01:40,400 --> 00:01:42,680 So first, AI. 59 00:01:42,680 --> 00:01:44,840 It's basically the rocket fuel 60 00:01:44,840 --> 00:01:47,200 propelling this incredible growth, you know? 61 00:01:47,200 --> 00:01:48,640 The report actually ranks it 62 00:01:48,640 --> 00:01:52,160 as the second most important revenue driver 63 00:01:52,160 --> 00:01:53,640 for semiconductor companies. 64 00:01:53,640 --> 00:01:55,280 Second, what's number one? 65 00:01:55,280 --> 00:01:57,920 That would be our old friend, the automotive industry. 66 00:01:57,920 --> 00:01:59,800 Interesting, so AI is really having 67 00:01:59,800 --> 00:02:01,280 that much of an impact already. 68 00:02:01,280 --> 00:02:03,800 Oh yeah, all those incredible AI advancements 69 00:02:03,800 --> 00:02:05,080 we keep hearing about, 70 00:02:05,080 --> 00:02:08,040 they're translating into a huge demand for chips. 71 00:02:08,040 --> 00:02:08,880 Makes sense. 72 00:02:08,880 --> 00:02:10,720 What kinds of chips are we talking about here? 73 00:02:10,720 --> 00:02:13,560 Well, we're seeing a massive surge in demand 74 00:02:13,560 --> 00:02:15,800 for microprocessors, especially GPUs. 75 00:02:15,800 --> 00:02:18,320 GPUs, those are like for graphics cards, right? 76 00:02:18,320 --> 00:02:21,840 Right, but they're also the workhorses behind AI, 77 00:02:21,840 --> 00:02:25,000 crunching all that data for complex AI models. 78 00:02:25,000 --> 00:02:27,240 Ah, so they're not just for gaming anymore? 79 00:02:27,240 --> 00:02:28,080 Not at all. 80 00:02:28,080 --> 00:02:29,800 In fact, the report specifically 81 00:02:29,800 --> 00:02:32,840 singles out microprocessors, especially GPUs, 82 00:02:32,840 --> 00:02:35,760 as like the biggest opportunity for growth. 83 00:02:35,760 --> 00:02:37,680 Huh, that's pretty amazing. 84 00:02:37,680 --> 00:02:38,680 It is. 85 00:02:38,680 --> 00:02:41,520 But now let's talk about that automotive industry. 86 00:02:41,520 --> 00:02:43,280 I was a bit surprised to see it still holding 87 00:02:43,280 --> 00:02:45,280 the top spot as a revenue driver, 88 00:02:45,280 --> 00:02:46,560 especially with all the talk about 89 00:02:46,560 --> 00:02:47,960 the chip shortage you're using up. 90 00:02:47,960 --> 00:02:49,440 Yeah, I was curious about that too. 91 00:02:49,440 --> 00:02:51,880 You'd think the demand would start to slow down, right? 92 00:02:51,880 --> 00:02:54,200 You'd think so, but it's actually the opposite. 93 00:02:54,200 --> 00:02:57,040 Car companies are still hungry for more chips. 94 00:02:57,040 --> 00:02:57,880 Why is that? 95 00:02:57,880 --> 00:02:59,200 Are they stockpiling or something? 96 00:02:59,200 --> 00:03:01,920 It's not about stockpiling, it's about the future of cars. 97 00:03:01,920 --> 00:03:02,840 Think electric vehicles. 98 00:03:02,840 --> 00:03:03,960 Right, those need chips. 99 00:03:03,960 --> 00:03:06,280 And then all those advanced driver assistance systems, 100 00:03:06,280 --> 00:03:08,320 like lane assist and automatic braking. 101 00:03:08,320 --> 00:03:10,600 Oh yeah, those features are getting pretty common. 102 00:03:10,600 --> 00:03:12,040 Exactly, and of course, the race 103 00:03:12,040 --> 00:03:13,920 towards fully autonomous driving. 104 00:03:13,920 --> 00:03:17,440 So basically, cars are becoming more like computers on wheels? 105 00:03:17,440 --> 00:03:18,280 You got it. 106 00:03:18,280 --> 00:03:21,160 And all of these trends are pushing the need 107 00:03:21,160 --> 00:03:25,320 for more and more sophisticated, powerful chips. 108 00:03:25,320 --> 00:03:27,440 So even though the immediate chip shortage 109 00:03:27,440 --> 00:03:30,120 might be easing up, the long-term demand 110 00:03:30,120 --> 00:03:32,600 from car companies is actually growing. 111 00:03:32,600 --> 00:03:33,760 Precisely. 112 00:03:33,760 --> 00:03:37,120 KPMG predicts that the automotive semiconductor market 113 00:03:37,120 --> 00:03:41,040 could hit a jaw-dropping $250 billion by 2040. 114 00:03:41,040 --> 00:03:42,960 Wow, $250 billion. 115 00:03:42,960 --> 00:03:45,040 That's almost half of the entire projected 116 00:03:45,040 --> 00:03:47,360 semiconductor market by that time, just for cars. 117 00:03:47,360 --> 00:03:49,800 So we have this exciting story of growth 118 00:03:49,800 --> 00:03:52,520 with AI and automotive in the lead roles. 119 00:03:52,520 --> 00:03:53,960 It is exciting. 120 00:03:53,960 --> 00:03:56,040 But like any good story, there's a twist. 121 00:03:56,040 --> 00:03:57,560 Oh, a plot twist. 122 00:03:57,560 --> 00:03:58,960 You could say that. 123 00:03:58,960 --> 00:04:01,960 The report also hints at some potential roadblocks ahead. 124 00:04:01,960 --> 00:04:03,080 Oh no, roadblocks. 125 00:04:03,080 --> 00:04:04,040 What kind of roadblocks? 126 00:04:04,040 --> 00:04:05,560 Well, there's one major challenge 127 00:04:05,560 --> 00:04:08,040 that could really throw a wrench in the works, 128 00:04:08,040 --> 00:04:08,880 the talent shortage. 129 00:04:08,880 --> 00:04:10,840 Uh-oh, the infamous talent shortage. 130 00:04:10,840 --> 00:04:11,680 I know, right? 131 00:04:11,680 --> 00:04:12,880 I feel like we've been hearing about this forever. 132 00:04:12,880 --> 00:04:14,960 It's like the industry's Achilles heel. 133 00:04:14,960 --> 00:04:15,800 Exactly. 134 00:04:15,800 --> 00:04:16,960 And it's not just lingering. 135 00:04:16,960 --> 00:04:18,320 It's actually getting worse. 136 00:04:18,320 --> 00:04:18,920 Really? 137 00:04:18,920 --> 00:04:19,720 Yeah. 138 00:04:19,720 --> 00:04:22,000 For the third year in a row, the talent shortage 139 00:04:22,000 --> 00:04:24,880 is the number one concern for semiconductor companies. 140 00:04:24,880 --> 00:04:26,600 OK, so how bad is it? 141 00:04:26,600 --> 00:04:30,560 Well, basically, the industry is growing so fast 142 00:04:30,560 --> 00:04:33,600 that there just aren't enough skilled workers to keep up. 143 00:04:33,600 --> 00:04:36,080 It's like a classic supply and demand problem, 144 00:04:36,080 --> 00:04:37,680 but with much higher stakes. 145 00:04:37,680 --> 00:04:38,800 Exactly. 146 00:04:38,800 --> 00:04:39,680 Think about it. 147 00:04:39,680 --> 00:04:42,520 They can build these massive state-of-the-art chip 148 00:04:42,520 --> 00:04:43,160 factories. 149 00:04:43,160 --> 00:04:43,640 Right. 150 00:04:43,640 --> 00:04:45,000 We've seen the news about those. 151 00:04:45,000 --> 00:04:47,560 But they might not have enough people to actually run them. 152 00:04:47,560 --> 00:04:48,960 Ooh, that's a problem. 153 00:04:48,960 --> 00:04:51,040 It's a huge bottleneck. 154 00:04:51,040 --> 00:04:53,040 And it's not just engineers either. 155 00:04:53,040 --> 00:04:54,680 Oh. 156 00:04:54,680 --> 00:04:56,080 Who else is in demand? 157 00:04:56,080 --> 00:04:58,280 We're talking about a shortage across the board, 158 00:04:58,280 --> 00:05:01,160 technicians, data scientists, AI specialists. 159 00:05:01,160 --> 00:05:02,840 So all the hot jobs right now. 160 00:05:02,840 --> 00:05:06,080 Even skilled tradespeople to build and maintain those factories. 161 00:05:06,080 --> 00:05:07,920 So it's not just a tech industry issue. 162 00:05:07,920 --> 00:05:10,120 It's an economic and social challenge, too. 163 00:05:10,120 --> 00:05:11,560 You hit the nail on the head. 164 00:05:11,560 --> 00:05:12,840 And it's only going to get tougher 165 00:05:12,840 --> 00:05:14,440 as the industry continues to boom. 166 00:05:14,440 --> 00:05:16,080 So what are companies doing about it? 167 00:05:16,080 --> 00:05:18,360 Are they just sitting there, wringing their hands? 168 00:05:18,360 --> 00:05:19,920 Definitely not. 169 00:05:19,920 --> 00:05:21,960 The report highlights how they're scrambling 170 00:05:21,960 --> 00:05:23,480 to address this talent crunch. 171 00:05:23,480 --> 00:05:24,560 Like what? 172 00:05:24,560 --> 00:05:25,920 Throwing money at the problem? 173 00:05:25,920 --> 00:05:26,800 Well, that's part of it. 174 00:05:26,800 --> 00:05:28,640 They're offering attractive bonus packages. 175 00:05:28,640 --> 00:05:29,200 Good sense. 176 00:05:29,200 --> 00:05:31,040 But they're also getting creative. 177 00:05:31,040 --> 00:05:33,040 They're partnering with universities, 178 00:05:33,040 --> 00:05:36,160 offering remote work options, basically pulling out 179 00:05:36,160 --> 00:05:39,280 all the stops to attract and retain skilled workers. 180 00:05:39,280 --> 00:05:40,680 I guess they have to. 181 00:05:40,680 --> 00:05:41,920 It's almost ironic, right? 182 00:05:41,920 --> 00:05:43,600 We're talking about this cutting-edge industry. 183 00:05:43,600 --> 00:05:44,920 The industry of the future. 184 00:05:44,920 --> 00:05:45,420 Yeah. 185 00:05:45,420 --> 00:05:48,560 They're pushing the boundaries of AI and self-driving cars. 186 00:05:48,560 --> 00:05:50,200 And their biggest hurdle is finding 187 00:05:50,200 --> 00:05:52,560 enough humans to make it all happen. 188 00:05:52,560 --> 00:05:54,320 It really shows the human element 189 00:05:54,320 --> 00:05:55,880 in all of this high-tech stuff. 190 00:05:55,880 --> 00:05:56,920 It does. 191 00:05:56,920 --> 00:06:00,440 Without a skilled workforce, all those ambitious plans 192 00:06:00,440 --> 00:06:03,040 for growth and innovation could fall apart. 193 00:06:03,040 --> 00:06:04,760 That's a sobering thought. 194 00:06:04,760 --> 00:06:05,440 It is. 195 00:06:05,440 --> 00:06:06,080 But hold on. 196 00:06:06,080 --> 00:06:07,400 There's another layer of complexity 197 00:06:07,400 --> 00:06:08,520 we haven't even touched on yet. 198 00:06:08,520 --> 00:06:10,400 Oh, there's more. 199 00:06:10,400 --> 00:06:14,640 The report also mentions rising geopolitical tensions. 200 00:06:14,640 --> 00:06:16,520 Oh, this is where things get really complicated. 201 00:06:16,520 --> 00:06:17,440 You're telling me. 202 00:06:17,440 --> 00:06:18,960 Specifically, they talk about something 203 00:06:18,960 --> 00:06:20,400 called territorialism. 204 00:06:20,400 --> 00:06:21,520 Territorialism. 205 00:06:21,520 --> 00:06:23,520 What does that mean in this context? 206 00:06:23,520 --> 00:06:25,160 It basically refers to the nationalization 207 00:06:25,160 --> 00:06:26,600 of the semiconductor industry. 208 00:06:26,600 --> 00:06:29,440 So instead of this globally interconnected chip-making 209 00:06:29,440 --> 00:06:31,520 ecosystem we have now, countries are 210 00:06:31,520 --> 00:06:33,760 trying to bring more production back home. 211 00:06:33,760 --> 00:06:35,120 That's exactly it. 212 00:06:35,120 --> 00:06:37,840 Governments are realizing just how crucial these chips are 213 00:06:37,840 --> 00:06:40,120 for, well, basically everything. 214 00:06:40,120 --> 00:06:43,080 National security, consumer products, everything. 215 00:06:43,080 --> 00:06:45,520 And they want to secure their own chip supplies, 216 00:06:45,520 --> 00:06:47,960 reduce their reliance on foreign suppliers. 217 00:06:47,960 --> 00:06:50,440 Makes sense from a national security standpoint, I guess. 218 00:06:50,440 --> 00:06:50,920 Right. 219 00:06:50,920 --> 00:06:52,720 So they're offering incentives, investing 220 00:06:52,720 --> 00:06:53,920 in local manufacturing. 221 00:06:53,920 --> 00:06:58,080 But wouldn't that disrupt the existing global supply chains? 222 00:06:58,080 --> 00:07:00,200 That's the million dollar question. 223 00:07:00,200 --> 00:07:02,680 And it's causing some serious ripples in the industry. 224 00:07:02,680 --> 00:07:06,360 So how are companies responding to this shift? 225 00:07:06,360 --> 00:07:09,960 Well, the report highlights one key strategy. 226 00:07:09,960 --> 00:07:11,280 Diversification. 227 00:07:11,280 --> 00:07:12,520 Diversification. 228 00:07:12,520 --> 00:07:15,040 As in not putting all their eggs in one basket. 229 00:07:15,040 --> 00:07:15,880 Exactly. 230 00:07:15,880 --> 00:07:19,720 Instead of relying heavily on a single region, like Asia, 231 00:07:19,720 --> 00:07:21,280 they're spreading out their operations 232 00:07:21,280 --> 00:07:22,760 to different parts of the world. 233 00:07:22,760 --> 00:07:25,760 So it's like a giant chess game with governments and companies 234 00:07:25,760 --> 00:07:27,160 making strategic moves. 235 00:07:27,160 --> 00:07:28,400 You've got it. 236 00:07:28,400 --> 00:07:30,040 And the stakes are incredibly high. 237 00:07:30,040 --> 00:07:31,120 I bet. 238 00:07:31,120 --> 00:07:34,600 So what are some of the specific regions companies 239 00:07:34,600 --> 00:07:37,600 are eyeing for this diversification? 240 00:07:37,600 --> 00:07:38,680 That's a great question. 241 00:07:38,680 --> 00:07:41,280 And it leads us into some of the other fascinating findings 242 00:07:41,280 --> 00:07:41,960 from this report. 243 00:07:41,960 --> 00:07:43,120 OK, lay it on me. 244 00:07:43,120 --> 00:07:44,240 I'm ready for part two. 245 00:07:44,240 --> 00:07:45,080 Well, stay tuned. 246 00:07:45,080 --> 00:07:47,200 We'll be right back after a short break. 247 00:07:47,200 --> 00:07:50,120 So you were about to spill the beans on which regions 248 00:07:50,120 --> 00:07:53,120 are catching the eye of these chip making execs. 249 00:07:53,120 --> 00:07:53,480 Right. 250 00:07:53,480 --> 00:07:55,920 Well, the report highlights some really interesting shifts 251 00:07:55,920 --> 00:07:56,280 happening. 252 00:07:56,280 --> 00:07:57,440 OK, lay it on me. 253 00:07:57,440 --> 00:08:01,040 Well, one region that's really heating up is Southeast Asia. 254 00:08:01,040 --> 00:08:02,520 Southeast Asia. 255 00:08:02,520 --> 00:08:03,000 Yep. 256 00:08:03,000 --> 00:08:06,160 We're talking about countries like Vietnam, Malaysia, 257 00:08:06,160 --> 00:08:06,880 Thailand. 258 00:08:06,880 --> 00:08:07,400 Interesting. 259 00:08:07,400 --> 00:08:09,640 I guess they've been building up their manufacturing sectors 260 00:08:09,640 --> 00:08:10,480 for a while now. 261 00:08:10,480 --> 00:08:11,280 They have. 262 00:08:11,280 --> 00:08:12,680 And they offer a pretty sweet deal 263 00:08:12,680 --> 00:08:14,320 for semiconductor companies. 264 00:08:14,320 --> 00:08:14,560 Yeah. 265 00:08:14,560 --> 00:08:16,040 Favorable manufacturing costs. 266 00:08:16,040 --> 00:08:16,440 Right. 267 00:08:16,440 --> 00:08:17,720 Got to keep those costs down. 268 00:08:17,720 --> 00:08:20,600 Once they have skilled labor pools and some pretty 269 00:08:20,600 --> 00:08:22,880 enticing government incentives. 270 00:08:22,880 --> 00:08:24,600 So it's a win-win, I guess. 271 00:08:24,600 --> 00:08:25,160 Exactly. 272 00:08:25,160 --> 00:08:27,240 Makes a lot of sense why companies are looking that way. 273 00:08:27,240 --> 00:08:28,000 For sure. 274 00:08:28,000 --> 00:08:29,600 But what about closer to home? 275 00:08:29,600 --> 00:08:32,400 Is there any movement towards bringing production back 276 00:08:32,400 --> 00:08:35,760 closer to the US or Europe? 277 00:08:35,760 --> 00:08:37,160 You're talking about near shoring. 278 00:08:37,160 --> 00:08:37,600 Yep. 279 00:08:37,600 --> 00:08:38,520 That's the buzzword. 280 00:08:38,520 --> 00:08:41,320 Well, the report actually calls out near shoring 281 00:08:41,320 --> 00:08:43,760 as a key strategy for companies trying 282 00:08:43,760 --> 00:08:46,240 to navigate all these geopolitical uncertainties. 283 00:08:46,240 --> 00:08:47,400 So it's not just talk. 284 00:08:47,400 --> 00:08:49,080 There's actual action happening. 285 00:08:49,080 --> 00:08:49,440 Oh, yeah. 286 00:08:49,440 --> 00:08:50,320 Big time. 287 00:08:50,320 --> 00:08:51,600 The US government, for instance, 288 00:08:51,600 --> 00:08:55,120 has been pushing hard with its CHIPPS and Science Act. 289 00:08:55,120 --> 00:08:56,240 I've heard about that. 290 00:08:56,240 --> 00:08:58,720 It's offering billions of dollars in incentives 291 00:08:58,720 --> 00:09:01,520 to lure companies into building new chip factories 292 00:09:01,520 --> 00:09:02,960 right here on American soil. 293 00:09:02,960 --> 00:09:03,440 Wow. 294 00:09:03,440 --> 00:09:04,680 Billions with a B. 295 00:09:04,680 --> 00:09:05,720 Billions. 296 00:09:05,720 --> 00:09:09,080 It's a serious play by the US to regain its footing 297 00:09:09,080 --> 00:09:10,960 as a semiconductor powerhouse. 298 00:09:10,960 --> 00:09:11,920 Makes sense. 299 00:09:11,920 --> 00:09:12,800 What about Europe? 300 00:09:12,800 --> 00:09:14,200 Are they doing anything similar? 301 00:09:14,200 --> 00:09:16,600 Europe is definitely not sitting on the sidelines. 302 00:09:16,600 --> 00:09:19,040 The European Union has its own CHIPPS Act 303 00:09:19,040 --> 00:09:21,520 aiming to beef up its semiconductor industry 304 00:09:21,520 --> 00:09:23,640 and reduce reliance on Asia. 305 00:09:23,640 --> 00:09:25,160 So they're playing the same game. 306 00:09:25,160 --> 00:09:26,480 Pretty much. 307 00:09:26,480 --> 00:09:28,960 We're seeing investments pouring into new factories, 308 00:09:28,960 --> 00:09:32,000 R&D facilities, and all sorts of initiatives 309 00:09:32,000 --> 00:09:34,560 to attract and train skilled workers over there. 310 00:09:34,560 --> 00:09:36,680 Sounds like a global race is heating up. 311 00:09:36,680 --> 00:09:37,480 It is. 312 00:09:37,480 --> 00:09:38,720 Governments and companies are all 313 00:09:38,720 --> 00:09:41,720 trying to grab their slice of that semiconductor pie. 314 00:09:41,720 --> 00:09:43,520 Makes you wonder who will come out on top. 315 00:09:43,520 --> 00:09:44,760 Time will tell. 316 00:09:44,760 --> 00:09:47,240 But this whole diversification thing, 317 00:09:47,240 --> 00:09:50,040 it's not exactly a walk in the park, right? 318 00:09:50,040 --> 00:09:52,240 I imagine it's pretty complicated to just pick up 319 00:09:52,240 --> 00:09:54,960 and move a massive manufacturing operation 320 00:09:54,960 --> 00:09:56,200 to a whole new country. 321 00:09:56,200 --> 00:09:56,800 Oh, yeah. 322 00:09:56,800 --> 00:09:59,160 I'm sure there are tons of headaches involved. 323 00:09:59,160 --> 00:10:01,160 The report actually acknowledges that. 324 00:10:01,160 --> 00:10:04,360 They say diversification comes with its own set of hurdles. 325 00:10:04,360 --> 00:10:04,920 Like what? 326 00:10:04,920 --> 00:10:05,960 What kind of hurdles? 327 00:10:05,960 --> 00:10:08,680 Well, companies have to deal with different regulations 328 00:10:08,680 --> 00:10:10,400 in each country. 329 00:10:10,400 --> 00:10:10,960 Paperwork. 330 00:10:10,960 --> 00:10:13,120 They've got a set of completely new supply chains. 331 00:10:13,120 --> 00:10:14,160 That can't be easy. 332 00:10:14,160 --> 00:10:15,600 And of course, they have to make sure 333 00:10:15,600 --> 00:10:17,960 they have access to all the skilled workers they need 334 00:10:17,960 --> 00:10:19,400 in these new locations. 335 00:10:19,400 --> 00:10:21,000 It's not just about building factories. 336 00:10:21,000 --> 00:10:23,360 It's about building entire ecosystems. 337 00:10:23,360 --> 00:10:24,360 That's a great way to put it. 338 00:10:24,360 --> 00:10:25,920 And then there's a whole incentive game 339 00:10:25,920 --> 00:10:27,080 that governments are playing. 340 00:10:27,080 --> 00:10:28,560 Yeah, you mentioned that earlier. 341 00:10:28,560 --> 00:10:30,560 What kind of incentives are we talking about? 342 00:10:30,560 --> 00:10:32,040 Like tax breaks? 343 00:10:32,040 --> 00:10:32,960 Tax breaks, for sure. 344 00:10:32,960 --> 00:10:34,600 But it goes way beyond that. 345 00:10:34,600 --> 00:10:35,160 Really? 346 00:10:35,160 --> 00:10:37,880 We're talking subsidies for building those factories. 347 00:10:37,880 --> 00:10:38,760 Like free money? 348 00:10:38,760 --> 00:10:39,880 Pretty close. 349 00:10:39,880 --> 00:10:42,120 There's funding for research and development, 350 00:10:42,120 --> 00:10:44,520 even streamlined permitting processes 351 00:10:44,520 --> 00:10:45,880 to get things moving faster. 352 00:10:45,880 --> 00:10:47,400 Wow, it sounds like they're really 353 00:10:47,400 --> 00:10:49,600 rolling out the red carpet for these chipmakers. 354 00:10:49,600 --> 00:10:50,240 They are. 355 00:10:50,240 --> 00:10:52,680 It's a pretty competitive landscape out there, 356 00:10:52,680 --> 00:10:56,000 with countries practically begging companies to set up shop. 357 00:10:56,000 --> 00:10:58,840 The semiconductor industry is getting the VIP treatment, 358 00:10:58,840 --> 00:10:59,560 for sure. 359 00:10:59,560 --> 00:11:00,800 It is. 360 00:11:00,800 --> 00:11:03,040 But with all this focus on manufacturing, 361 00:11:03,040 --> 00:11:05,040 it kind of makes you wonder, what's that? 362 00:11:05,040 --> 00:11:08,280 Are we overlooking the other parts of the value chain? 363 00:11:08,280 --> 00:11:11,160 Like what about the brains behind these chips? 364 00:11:11,160 --> 00:11:12,800 The folks who are actually designing 365 00:11:12,800 --> 00:11:14,800 the next generation of semiconductors. 366 00:11:14,800 --> 00:11:17,160 Ah, the designers and innovators. 367 00:11:17,160 --> 00:11:17,920 Yeah. 368 00:11:17,920 --> 00:11:20,440 It feels like all the attention is on building more factories. 369 00:11:20,440 --> 00:11:22,560 But what about the innovation side of things? 370 00:11:22,560 --> 00:11:23,240 Good point. 371 00:11:23,240 --> 00:11:24,840 That's where the real magic happens. 372 00:11:24,840 --> 00:11:26,040 Exactly. 373 00:11:26,040 --> 00:11:28,360 And that brings us to another crucial theme 374 00:11:28,360 --> 00:11:29,600 highlighted in this report. 375 00:11:29,600 --> 00:11:30,240 Ooh. 376 00:11:30,240 --> 00:11:31,360 OK, what is it? 377 00:11:31,360 --> 00:11:34,800 We'll dive into that right after this. 378 00:11:34,800 --> 00:11:38,160 OK, we're back and ready to wrap things up for today's deep 379 00:11:38,160 --> 00:11:41,040 dive into that KPMG semiconductor report. 380 00:11:41,040 --> 00:11:42,960 Feels like we've covered a lot of ground. 381 00:11:42,960 --> 00:11:44,120 We have. 382 00:11:44,120 --> 00:11:47,480 From AI and car chips to that talent shortage, 383 00:11:47,480 --> 00:11:51,040 and now this global chess game, it's a wild ride. 384 00:11:51,040 --> 00:11:53,800 It really underscores how dynamic this industry is. 385 00:11:53,800 --> 00:11:54,720 It does. 386 00:11:54,720 --> 00:11:56,080 But before the break, I was wondering 387 00:11:56,080 --> 00:11:58,480 if all this talk about factories and supply chains 388 00:11:58,480 --> 00:12:00,520 is overshadowing something pretty important. 389 00:12:00,520 --> 00:12:01,880 Oh. 390 00:12:01,880 --> 00:12:02,480 What's that? 391 00:12:02,480 --> 00:12:03,960 The innovation side of things. 392 00:12:03,960 --> 00:12:04,760 Oh, yeah. 393 00:12:04,760 --> 00:12:05,520 Good point. 394 00:12:05,520 --> 00:12:07,920 It seems everyone's obsessed with building more factories. 395 00:12:07,920 --> 00:12:08,320 Right. 396 00:12:08,320 --> 00:12:09,840 Got to pump out those chips. 397 00:12:09,840 --> 00:12:12,040 But what about the brains behind the chips? 398 00:12:12,040 --> 00:12:14,080 The people dreaming up the next generation 399 00:12:14,080 --> 00:12:15,160 of semiconductors. 400 00:12:15,160 --> 00:12:17,600 The designers, the engineers, the innovators. 401 00:12:17,600 --> 00:12:18,240 Exactly. 402 00:12:18,240 --> 00:12:19,760 Are they getting lost in the shuffle? 403 00:12:19,760 --> 00:12:21,640 Well, the report actually emphasizes 404 00:12:21,640 --> 00:12:23,640 that design and innovation are still 405 00:12:23,640 --> 00:12:26,080 the heart and soul of the semiconductor industry. 406 00:12:26,080 --> 00:12:27,480 So they haven't been forgotten. 407 00:12:27,480 --> 00:12:28,280 Not at all. 408 00:12:28,280 --> 00:12:31,480 Companies are realizing it's not just about making more chips. 409 00:12:31,480 --> 00:12:32,840 It's about making better chips. 410 00:12:32,840 --> 00:12:35,280 Better, faster, more specialized chips. 411 00:12:35,280 --> 00:12:37,600 So the real battle isn't just on the factory floor. 412 00:12:37,600 --> 00:12:40,160 It's in the R&D labs and design centers. 413 00:12:40,160 --> 00:12:41,280 Got it. 414 00:12:41,280 --> 00:12:43,120 That's where the real breakthroughs happen. 415 00:12:43,120 --> 00:12:45,480 And that's also where the talent shortage becomes even more 416 00:12:45,480 --> 00:12:46,480 critical, right? 417 00:12:46,480 --> 00:12:47,880 Absolutely. 418 00:12:47,880 --> 00:12:50,440 We need brilliant minds to push the boundaries 419 00:12:50,440 --> 00:12:52,280 of semiconductor technology. 420 00:12:52,280 --> 00:12:55,280 To create those chips that will power the AI revolution, 421 00:12:55,280 --> 00:12:56,240 self-driving cars. 422 00:12:56,240 --> 00:12:58,480 All those incredible innovations we can only 423 00:12:58,480 --> 00:12:59,760 dream of right now. 424 00:12:59,760 --> 00:13:02,320 So it's a race on two fronts. 425 00:13:02,320 --> 00:13:05,240 Building the infrastructure, and nurturing 426 00:13:05,240 --> 00:13:06,360 the intellectual capital. 427 00:13:06,360 --> 00:13:08,200 It's a two-pronged approach, for sure. 428 00:13:08,200 --> 00:13:08,560 OK. 429 00:13:08,560 --> 00:13:09,960 So what are some of the areas where 430 00:13:09,960 --> 00:13:13,080 we're seeing real innovation happening in semiconductors? 431 00:13:13,080 --> 00:13:14,520 What's next on the horizon? 432 00:13:14,520 --> 00:13:16,960 Well, the report highlights a few exciting areas. 433 00:13:16,960 --> 00:13:17,840 Hit me with it. 434 00:13:17,840 --> 00:13:21,200 One big one is the development of new materials for chips. 435 00:13:21,200 --> 00:13:22,000 New materials? 436 00:13:22,000 --> 00:13:22,480 Like what? 437 00:13:22,480 --> 00:13:25,200 We've been relying on silicon for decades. 438 00:13:25,200 --> 00:13:26,200 The old silicon. 439 00:13:26,200 --> 00:13:28,720 But now researchers are exploring other materials 440 00:13:28,720 --> 00:13:30,840 that could offer better performance, lower power 441 00:13:30,840 --> 00:13:33,000 consumption, all that good stuff. 442 00:13:33,000 --> 00:13:35,080 So silicon might be on its way out. 443 00:13:35,080 --> 00:13:37,360 It's facing some stiff competition. 444 00:13:37,360 --> 00:13:38,840 What are some of the contenders? 445 00:13:38,840 --> 00:13:42,080 Well, there's gallium nitride, silicon carbide. 446 00:13:42,080 --> 00:13:43,520 Those are some pretty sci-fi names. 447 00:13:43,520 --> 00:13:44,160 They are. 448 00:13:44,160 --> 00:13:47,960 And they have properties that make them perfect for high power, 449 00:13:47,960 --> 00:13:49,800 high frequency applications. 450 00:13:49,800 --> 00:13:53,320 Which are essential for the IBG networks, electric vehicles. 451 00:13:53,320 --> 00:13:54,160 The future. 452 00:13:54,160 --> 00:13:55,600 Exactly. 453 00:13:55,600 --> 00:13:57,680 Another area of intense focus is something 454 00:13:57,680 --> 00:13:59,920 called heterogeneous integration. 455 00:13:59,920 --> 00:14:02,440 Heterogeneous integration? 456 00:14:02,440 --> 00:14:03,960 Try saying that five times fast. 457 00:14:03,960 --> 00:14:04,880 I know, right? 458 00:14:04,880 --> 00:14:06,400 But it's a pretty cool concept. 459 00:14:06,400 --> 00:14:07,440 OK, break it down for me. 460 00:14:07,440 --> 00:14:10,560 It basically involves combining different types of chips. 461 00:14:10,560 --> 00:14:14,240 Each one optimized for a specific task onto a single package. 462 00:14:14,240 --> 00:14:16,160 So instead of one chip trying to do it all, 463 00:14:16,160 --> 00:14:19,200 you get a system of specialized chips working together. 464 00:14:19,200 --> 00:14:20,520 Like a dream team of chips. 465 00:14:20,520 --> 00:14:21,440 Exactly. 466 00:14:21,440 --> 00:14:25,520 It's all about maximizing efficiency and performance. 467 00:14:25,520 --> 00:14:26,600 That makes a lot of sense. 468 00:14:26,600 --> 00:14:29,480 It's a pretty exciting development in the world of chip design. 469 00:14:29,480 --> 00:14:31,480 It sounds like the semiconductor industry 470 00:14:31,480 --> 00:14:33,920 is entering a whole new era. 471 00:14:33,920 --> 00:14:37,720 New materials, new designs, new manufacturing techniques. 472 00:14:37,720 --> 00:14:39,280 It's mind-boggling. 473 00:14:39,280 --> 00:14:42,480 But at the end of the day, what does all this 474 00:14:42,480 --> 00:14:45,120 mean for us regular folks? 475 00:14:45,120 --> 00:14:47,000 That's the key question, isn't it? 476 00:14:47,000 --> 00:14:49,080 How will these trends shape our lives? 477 00:14:49,080 --> 00:14:49,480 Exactly. 478 00:14:49,480 --> 00:14:51,400 I mean, the semiconductor industry 479 00:14:51,400 --> 00:14:53,320 might seem kind of invisible, but. 480 00:14:53,320 --> 00:14:55,440 It's the foundation of our digital world. 481 00:14:55,440 --> 00:14:58,280 Our smartphones, our laptops, our cars, 482 00:14:58,280 --> 00:15:00,240 even the infrastructure that connects us all 483 00:15:00,240 --> 00:15:02,080 runs on these tiny chips. 484 00:15:02,080 --> 00:15:06,160 And as those chips get more powerful, more efficient. 485 00:15:06,160 --> 00:15:08,120 It's going to unlock incredible possibilities. 486 00:15:08,120 --> 00:15:10,360 Things we can barely even imagine right now. 487 00:15:10,360 --> 00:15:13,720 It's both exciting and a bit daunting, you know? 488 00:15:13,720 --> 00:15:15,800 It feels like we're on the verge of something truly 489 00:15:15,800 --> 00:15:18,080 revolutionary, and those tiny semiconductors 490 00:15:18,080 --> 00:15:18,960 are at the heart of it all. 491 00:15:18,960 --> 00:15:20,560 I think that sums it up perfectly. 492 00:15:20,560 --> 00:15:22,360 Well, this has been an amazing deep dive. 493 00:15:22,360 --> 00:15:23,160 I learned so much. 494 00:15:23,160 --> 00:15:24,720 Thank you for walking us through it all. 495 00:15:24,720 --> 00:15:25,320 My pleasure. 496 00:15:25,320 --> 00:15:26,760 It's always a fascinating topic. 497 00:15:26,760 --> 00:15:28,000 And to all our listeners, we hope 498 00:15:28,000 --> 00:15:30,600 you enjoyed this journey into the world of semiconductors. 499 00:15:30,600 --> 00:15:32,920 It's an industry worth keeping an eye on. 500 00:15:32,920 --> 00:15:33,840 Absolutely. 501 00:15:33,840 --> 00:15:35,960 Until next time, keep exploring, keep learning. 502 00:15:35,960 --> 00:15:38,120 And we'll see you back here for another deep dive 503 00:15:38,120 --> 00:15:56,640 into the world of tech and innovation.