Integration becomes semiconductor industry’s biggest challenge

Integration has emerged as the semiconductor industry’s main difficulty, replacing supply chain pressure as the concern most often identified by businesses, according to a global study by HCLTech reported by Outlook Business.

The findings come as companies across industries become more reliant on chips for products and operations. HCLTech questioned 300 senior executives in the United States, Europe and Asia. Those surveyed worked in areas including engineering, research and development, semiconductors and hardware, product development, innovation, and technology strategy.

The study found that 98% of the businesses consulted now depend on semiconductors more heavily than they did three years ago. Almost all—99%—expect that reliance to grow during the next five years. The results suggest that decisions about chip architecture are increasingly being treated as business choices rather than as matters confined to technical teams.

Reliance grows across sectors

Artificial intelligence is adding to that strategic pressure. Around 71% of respondents said AI is making semiconductor architecture more important to their organisations’ business decisions.

Industrial automation recorded the sharpest increase in dependence among the sectors included in the research. Three-quarters of respondents in that sector said their organisations were substantially more reliant on semiconductors than they had been three years earlier.

The report also indicates that the challenge is no longer simply securing enough chips or obtaining higher performance. Respondents most frequently pointed to difficulties integrating existing solutions as the leading explanation for why those solutions do not fully meet their needs. Supply chain restrictions and performance shortcomings ranked behind integration.

Integration was the top concern in medical devices and industrial automation. It also appeared among the two most important concerns in each of the four sectors covered by the research, showing that the issue extends beyond any one application area.

Partnerships become more important

Businesses are responding by looking for engineering service providers with capabilities that go beyond chip design or component supply. The largest share of respondents, 67%, said they value providers able to combine hardware and software. Supply chain and product-lifecycle assistance was cited by 61%, while 59% highlighted the importance of stronger knowledge of their industries.

For HCLTech, those preferences point to a change in where companies believe competitive strength is created. The report argues that the ability to connect systems, manage products over their lifespans and understand sector-specific requirements may matter as much as the characteristics of the silicon itself.

Ameer Saithu, HCLTech’s executive vice-president and global head of its semiconductor business, said the issue now affects corporate strategy as well as engineering plans. In his view, companies are focused not only on selecting chips but also on building capabilities that can support silicon-based products through long development cycles, demanding regulatory environments and complicated integration work.

That emphasis raises the importance of the external firms businesses choose to support their semiconductor activities. If integration is the point at which many current solutions fall short, engineering partners may be judged increasingly on how effectively they connect hardware, software, supply arrangements and industry requirements.

Shift away from standard silicon

The research also suggests that many companies may change how they obtain semiconductors. At present, 79% of the enterprises surveyed rely either completely on commercially available chips or mainly on such products with only modest customisation.

That pattern is expected to change. Within five years, 66% of respondents anticipate moving to another approach, indicating a possible shift in the balance between standard products and more tailored semiconductor strategies.

Taken together, the findings describe an industry challenge that extends beyond chip availability. As dependence rises and AI increases the significance of chip architecture, companies are reassessing how semiconductors fit into their products and long-term plans. HCLTech’s report, as cited by Outlook Business, presents integration expertise and engineering relationships as central to that transition.