The semiconductor industry remains the backbone of digital innovation, from AI and cloud computing to autonomous vehicles and next-generation mobility. After a volatile 2023, the industry rebounded selectively in 2024 with strong growth in high-performance computing, AI accelerators, and advanced-node foundry services. However, this growth is uneven. While global leaders surged with cutting-edge R&D and close ties to hyperscalers, others struggled with legacy demand and geopolitical restrictions. Amid these shifts, the engineering segment of the semiconductor value chain is transforming. Generative AI, chiplet architecture, photonic-electronic co-design, and heterogeneous integration are rethinking their design and manufacturing strategies. Simultaneously, automotive and consumer Original Equipment Makers (OEMs) are increasing their internal silicon initiatives. Additionally, Global Capability Centers (GCCs) have emerged as pivotal hubs to scale innovation, access talent, and mitigate supply risks. This report serves as a comprehensive guide for stakeholders navigating the evolving semiconductor landscape. It offers a data-driven analysis of market dynamics, engineering outsourcing trends, provider positioning, and strategic imperatives for enterprises and suppliers.

The increasing adoption of AI, the Internet of Things (IoT), and 5G is significantly driving Engineering Research and Development (ER&D) investments in the semiconductor industry. Advances in semiconductor technologies, such as smaller node sizes, innovative materials, AI-enabled chipsets, custom-designed chips, advanced packaging techniques, and emerging chip architectures, are accelerating innovation. Companies are also leveraging generative AI to enhance semiconductor engineering. However, semiconductor enterprises struggle with meeting evolving customer demands and managing increased complexities in the value chain due to design changes and complex validation procedures. Providers in the semiconductor engineering industry are vital in addressing these challenges. They support fabless companies, integrated device manufacturers, electronic design automation tool providers, and foundries. In this report, we assess 19 semiconductor engineering services providers’ capabilities and offerings. The report highlights their key strengths and limitations regarding enterprise sourcing considerations. Scope Industry: ER&D Geography: global This assessment is based on Everest Group’s RFI process for the calendar year 2025, interactions with leading providers, client reference checks, and an ongoing analysis of the engineering services market. Contents In this report, we: Examine the semiconductor engineering services landscape Compare providers’ key strengths and limitations Assess each provider’s key solutions and investments Membership(s) Engineering Research and Development Sourcing and Vendor Management

The increasing adoption of AI, internet of things, and 5G is significantly driving Engineering Research and Development (ER&D) investments in the semiconductor industry. Fueled by advances in semiconductor technologies, such as smaller node sizes, innovative materials, AI-enabled chipsets, custom-designed chips, advanced packaging techniques, and emerging chip architectures, companies are also harnessing generative AI to enhance semiconductor engineering. However, semiconductor enterprises face challenges in meeting evolving customer demands and managing increased complexities in the value chain due to design changes and complex validation procedures. Providers in semiconductor engineering play a crucial role in addressing these needs by supporting fabless companies, integrated device manufacturers, electronic design automation tool providers, and foundries. In this research, we assess 18 leading providers associated with semiconductor engineering, along with sourcing considerations for enterprises. This assessment is based on RFI responses from providers, interactions with their semiconductor engineering leadership team, client reference checks, and an ongoing analysis of the engineering services market. Scope Industry: ER&D Geography: global Contents This report covers: The Semiconductor Engineering Services PEAK Matrix® 2024 Key characteristics of Leaders, Major Contenders, and Aspirants A summary dashboard assessing each provider’s vision and capability and market impact Providers’ strengths and limitations, along with enterprise sourcing considerations Membership(s) Engineering Research and Development Sourcing and Vendor Management

The semiconductor industry is undergoing transformative shifts shaped by technological advances, economic factors, and global disruptions. Our report provides a comprehensive analysis of the semiconductor industry’s intricate landscape, emphasizing its vital role spanning diverse sectors such as computing, automotive, medical devices, and consumer electronics. Despite encountering challenges, including a reduced growth rate in 2022 and the first half of 2023 due to factors such as high inflation, increased energy costs, and supply chain disruptions, the semiconductor industry remains a vital catalyst for growth in the digital landscape of the future. In this report, we examine the semiconductor market and its various constituents before diving into the industry’s Engineering Research and Development (ER&D) aspects. We identify and analyze the key technology and macroeconomic disruptions and comment on their impact on semiconductor engineering and outsourcing. Scope Industry: Semiconductors All geographies Engineering Research and Development Contents  In this viewpoint, we examine: The components of the semiconductor industry’s value chain The ER&D aspects of the semiconductor industry Technological disruptions impacting the semiconductor industry Macroeconomic factors influencing the semiconductor industry Membership(s) Engineering Research and Development Sourcing and Vendor Management

The widespread digitalization trend in various industries has prompted enterprises to integrate software and advanced technologies into their products and offerings, aiming for quicker time-to-market and greater cost efficiency. In response, top providers have actively partnered with enterprises to meet evolving customer expectations. The PEAK Matrix® Provider of the Year awards assist enterprises in identifying exceptional providers with robust capabilities and effective service strategies that align with the evolving demand for enterprise engineering services. In this research, we present our 2023 PEAK Matrix® Provider of the Year awards for engineering services providers, to recognize companies that consistently exhibit leadership and top performance across key themes influencing engineering R&D in 2022. Scope We selected the Engineering Services PEAK Matrix® Provider of the Year award winners based on the consolidated scores that the providers achieved in the Leaders, Major Contenders, Aspirants, and Star Performers positions on our PEAK Matrix® evaluations. During the CY’22, 55 providers were featured across ten engineering services PEAK Matrix® evaluations. The awards were determined based on performance across the following segments − Industry 4.0, software products engineering, digital products engineering, digital twins, and connected medical devices. Contents The award categories in the research include: ES Top 15 – recognizing the top 15 providers of engineering services based on a consolidated scoring of rankings within the PEAK Matrix® reports Top 5 ES Challengers – recognizing the next 5 providers that are credible partners for enterprises and are positioning themselves as rivals to leading participants

The digitalization wave sweeping across industries compelled enterprises to integrate software and next-generation technologies in their products and offerings, all while accelerating time-to-market and keeping a lid on costs. Leading service providers responded and engaged with enterprises to help them keep pace with rapidly evolving customer expectations. The PEAK Matrix® Provider of the Year awards help enterprises to identify distinguished providers with strong capabilities and successful services strategies that align well with the evolving enterprise engineering services demand. In this research, we present our 2022 PEAK Matrix® Provider of the Year awards for engineering services providers, our first edition of the awards, to recognize companies that exhibit consistent leadership and top performance across key themes influencing engineering R&D in 2021. Our methodology We select the Engineering Services PEAK Matrix® Provider of the Year award winners based on the consolidated scores providers achieve in the Leader, Major Contender, Aspirant, and Star Performers positions on our PEAK Matrix® evaluations. During the Q3 2020 to Q3 2021 time period, 54 providers were featured across five engineering services PEAK Matrix® evaluations. The awards are determined based on performance across the following segments − Industry 4.0, software products engineering, semiconductor engineering, ACES automotive engineering, and 5G engineering services. Award categories Award categories presented in the research include: The ES Top 15 list – recognizing the top 15 providers of engineering services based on a consolidated scoring of rankings within the PEAK Matrix® reports Top 5 ES Challengers – recognizing the next 5 providers that are credible partners for enterprises and are positioning themselves as rivals to leading players

The semiconductor industry is experiencing continuous growth in ER&D investments, driven by increasing adoption of AI chips, proliferation of IoT and connected devices, and the shift to lower technology nodes. This has happened despite the worldwide chip shortage in 2020, as enterprises and governments suffered from the disruption in the globally-dispersed supply chain and started focusing on increasing product diversity and self-sufficiency in the value chain. Moving ahead, enterprises need to be cognizant of the changes in the post-pandemic market – the evolving product demand landscape, restrictive trade environments, and the possibilities of inorganic growth. Service providers are playing a crucial role by proactively partnering with semiconductor enterprises such as fabless companies, IDMs, and foundries across the areas of product development, fabrication, testing, and life-cycle management. They help enterprises tackle challenges in meeting evolving customer demands and managing increased complexities in the value chain due to design changes and complex validation procedures. This research examines some of the prominent trends in the global semiconductor engineering market and provides a view on the prevalent outsourcing landscape. It also analyzes the services market on various trends, such as rising talent demand, the role of emerging technologies, and increasing player consolidation. Scope Research area: engineering services Geography: global Functional area: semiconductor engineering services Contents The report is divided into the following three sections: Market overview: examines semiconductor market size across key end-use industries areas and current global landscape of semiconductor engineering spend Emerging trends: studies some of the engineering priorities of enterprises, the effect of worldwide chip shortage, and evolving trends for the post-pandemic world Outsourcing landscape: includes outsourced engineering spend analysis, popular engagement models, dynamics of talent demand, and competitive investments by service providers Membership(s) Engineering Services Sourcing and Vendor Management

The semiconductor industry is experiencing significant ER&D investments driven by emerging technologies such as Artificial Intelligence (AI), 5G, and the Internet of Things (IoT). However, semiconductor enterprises face challenges in meeting evolving customer demands and managing increased complexities in the value chain due to design changes and complex validation procedures. Service providers are partnering with semiconductor enterprises such as fabless companies, Integrated Device Manufacturers (IDMs), and foundries to help deal with these challenges across the areas of product development, fabrication, testing, and life-cycle management. The providers’ semiconductor engineering service offerings span four service functions covering the semiconductor industry value chain: Design & verification Validation & testing Sustenance & value engineering Other services related to manufacturing This report assesses the dynamics of the global semiconductor engineering service provider market and presents detailed profiles of 16 leading engineering service providers featured on Everest Group’s Semiconductor Engineering Services PEAK Matrix®. Each profile provides a comprehensive picture of the service provider’s focus on semiconductor engineering services, key Intellectual Property (IP) / solutions, buyer case studies, partnerships, and domain investments. The report also includes our insights on enterprise sourcing considerations for each service provider. Scope Industry: semiconductors Geography: global Contents This report features 16 semiconductor engineering service provider profiles, each of which includes: Key strengths and limitations of each of the 16 semiconductor engineering services providers featured in our PEAK Matrix assessment An overview of the providers’ semiconductor engineering services business and offerings – vision & strategy, semiconductor engineering services revenue, and adoption across service segments, geographies, product categories, and client types An assessment of case studies, IP/solutions, partnerships, and domain investments Membership(s) Engineering Services Sourcing and Vendor Management

The semiconductor industry is experiencing significant ER&D investments driven by increasing adoption of AI chips, proliferation of IoT and connected devices, and the shift to lower technology nodes. However, semiconductor enterprises are facing challenges in meeting evolving customer demands and managing increased complexities in the value chain due to design changes and complex validation procedures. Service providers are playing a crucial role by proactively partnering with semiconductor enterprises such as fabless companies, IDMs, and foundries across the areas of product development, fabrication, testing, and life-cycle management. Their semiconductor engineering service offerings span four service functions, broadly capturing the semiconductor industry value chain: Design & verification Validation & testing Sustenance & value engineering Other services related to manufacturing In this research, we present an assessment of 16 leading service providers associated with semiconductor engineering, along with sourcing considerations for enterprises. This assessment is based on RFI responses from service providers, interactions with their semiconductor engineering leadership team, client reference checks, and an ongoing analysis of the engineering services market. Scope This research studies the following service providers associated with semiconductor engineering services: Alten, Capgemini, Cyient, HARMAN, HCL Technologies, INVECAS, LTTS, Mirafra Technologies, QuEST Global, Synapse Design, Tata Elxsi, TCS, Tech Mahindra, UST, VVDN Technologies, and Wipro. Industry: semiconductors Geography: global Contents This report maps and covers: TThe Semiconductor Engineering Services PEAK Matrix® 2021 TKey characteristics of Leaders, Major Contenders, and Aspirants TA summary dashboard capturing the relative assessment of each service provider’s vision & capability and market impact TProviders’ strengths and limitations vis-à-vis enterprise sourcing considerations Membership(s) Engineering Services Sourcing and Vendor Management

Engineering services has emerged as the fastest growing segment of the global services industry. Semiconductor industry has been witnessing a significant rise in Engineering and R&D (ER&D) spending over the last few years with IoT as the key revenue driver and increased focus on development of sensors with low physical footprint, low energy consumption, and high responsiveness. Everest Group estimates the semiconductor engineering global outsourcing industry to grow at an annual rate of 9.7%, reaching US$3 billion by 2020. As service providers prepare to ride on this wave of growth, they are making significant investments in building internal assets, expanding delivery capability, and upskilling their talent. Some service providers are also following the inorganic route to gain market share, acquiring companies to enter new markets and/or gain niche capabilities. One such example is the recently announced acquisition of Belgium-based fabless and analog Application-Specific Integrated Circuits (ASICs) design services firm, AnSem N.V., by India-based engineering services provider, Cyient, for a total enterprise value of US$17 million. This acquisition stands out in the market, in terms of market focus and overall strategy shift from services to solutions perspective. It also portends an impending consolidation wave. This Viewpoint discusses the details of the acquisition and the key factors that make this a favorable bet for Cyient, as well as implications that the acquisition will have on the broader market, both enterprise buyers and service providers. Membership(s) Engineering Services