The Core of Innovation

Pushing the Boundaries of Technology

In recent years, no segment of the tech industry has experienced a faster pace of technological advancement than semiconductors. The rapid adoption of AI and LLMs, and the corresponding demand for a next generation of chips and solutions to take advantage of these trends is forcing change on the traditional semiconductor commercial model. Thus, there are many specific challenges that face the industry, and Alexander Group has experience addressing each with industry leading insights and best practices.

Common challenges for the Semiconductor industry include:

• Product Offerings Move Beyond Hardware: Semiconductor companies are both broadening their product and increasing the volume and depth of their partnerships to include software and solutions. Customers are also demanding more flexible contracting and pricing models such as ELA’s and usage-based billing. These changes have put stress on both the direct and indirect selling motions. Sellers who have been successful in the previous commercial model may not have the ability to communicate the right value messages and companies need to evaluate the talent and headcount levels of their direct sales team. For indirect routes to market, these new more complex sales motions may require different partners and companies need to reevaluate their channel programs to make sure they have the right capability.
• More Routes to Market and More Buyers: Semiconductor do not just need to sell to OEM/ODMs; other strategic customers such as NSP and Hyperscalers have emerged as large consumers of chips. These customers need unique sales coverage and value messages to maximize revenue growth. Additionally, the route that products take to market has grown more complex, with SI, ISV and CSPs requiring influence in the value chain.
• Wave of Innovation Forcing a Reevaluation of Commercial Models: As innovation has changed the growth equation for many semiconductor companies, commercial model efficiency is being reevaluated. Sales motions can vary (i.e., Design Wins, Sell With, Sell To/Through, Influence) and identifying/tracking the right metrics can be challenging. Companies need to evaluate the metrics that accurately reflect influence on revenue growth, reward performance and hold individuals accountable.