The 2024 holiday season is just around the corner, but unlike previous years, the impact of semiconductor advancements on our celebrations is more palpable than ever. As semiconductor technology powers nearly every device and innovation, its influence on how we shop, entertain and connect during the holidays is growing at an unprecedented rate. In this blog, we will explore the current state of semiconductor technology, forecasts for 2025 and how these advancements may redefine our experiences during the festive season—from gifting to sustainable practices.
The Current Landscape of Semiconductor Technology
Overview of 2024 Trends
The semiconductor landscape in 2024 has been dominated by developments in AI processing, miniaturization and energy-efficient designs. AI-specific chips, such as NVIDIA’s H100 Tensor Core GPUs, have made significant strides, improving machine learning capabilities across various sectors, from healthcare to consumer electronics. Additionally, the continued demand for high-performance computing (HPC) and IoT solutions has driven investments into low-power, high-efficiency chips like ARM Cortex-M85 MCUs, catering to devices that require both connectivity and longevity.
Impact on Consumer Electronics
This year’s semiconductor advancements have translated into smarter, more powerful gadgets. Consumers are enjoying devices with faster processing speeds, reduced power consumption and enhanced connectivity—all of which are crucial for holiday gadgets. For instance, wearables and smart home products equipped with the latest Bluetooth and Wi-Fi 6 technology provide seamless connectivity, while 4K gaming consoles and streaming devices powered by AMD’s RDNA architecture elevate entertainment experiences. The technology powering these devices is increasingly efficient and effective, allowing us to connect with family, enjoy immersive games and automate our homes with ease.
Predictions for Semiconductor Innovations in 2025
AI and Machine Learning
Looking ahead to 2025, AI-driven semiconductors are set to make significant strides in personalization. Chips like Qualcomm’s Snapdragon 8 Gen 3 are expected to bring advanced AI features to mobile devices, enabling hyper-personalized shopping experiences and gift recommendations based on individual preferences and behaviors. Retailers are likely to use this technology to enhance the holiday shopping journey, offering AI-assisted guidance for gift-givers seeking that perfect present, tailored to each recipient’s taste and needs.
Internet of Things (IoT)
IoT expansion is a key frontier, with semiconductors driving smarter and more interconnected holiday experiences. With smart homes expected to become even more intuitive and integrated, let’s imagine a future where your smart home decorates itself: LEDs and ornaments embedded with IoT sensors (powered by chips like STMicroelectronics’ STM32WB wireless MCUs) could sync with a voice command or smartphone, creating a holiday atmosphere in an instant. In the kitchen, IoT-enabled cooking appliances will simplify holiday meal prep, offering remote operation and even recipe recommendations based on ingredients in your fridge.
Energy Efficiency
Energy-efficient semiconductor solutions are likely to lead the way toward more sustainable holiday practices. In this regard, Infineon CoolSiC™ MOSFETs enable 98% efficiency in power converters for consumer electronics, significantly lowering energy usage while maintaining performance standards. These advancements will be crucial as we strive for more eco-friendly holidays, minimizing the environmental footprint of holiday displays and daily device usage.
Transforming Holiday Experiences
Enhanced Entertainment
Gaming and streaming devices powered by next-gen semiconductors are poised to transform holiday entertainment in 2025. Sony’s PlayStation and Microsoft’s Xbox, already boasting powerful processors, are expected to integrate even higher computational power, delivering richer graphics and faster processing speeds. The advent of 8K-ready consoles or cloud gaming powered by dedicated gaming chips will bring unprecedented levels of realism, powered by advancements such as AMD’s RDNA architecture enabling real-time ray tracing and optimized memory usage.
Virtual and Augmented Reality
The potential of VR and AR in holiday experiences is immense. By next year, more accessible AR/VR devices, likely driven by Qualcomm’s XR2 Gen 2 platform, could make virtual family gatherings a norm for long-distance relatives. Imagine sitting around a virtual Christmas table, sharing stories or shopping in a virtual mall with loved ones from across the world. Achieving sub-10 MS latency in Qualcomm’s XR2 Gen 2 platform will be critical to ensuring a seamless and immersive AR/VR experience, eliminating lag and discomfort during use. AR could also enhance in-store holiday shopping experiences by overlaying digital information on physical products, assisting customers with gift choices.
Smart Gift Giving
With the help of big data and advanced analytics powered by semiconductor advancements, gift-giving could become more thoughtful and precise. Smart devices embedded with data insights—such as wearables that track health metrics—could provide real-time, personalized recommendations for health-conscious gifts. Retailers may use insights from wearable data, smartphones and browsing behavior to guide consumers in finding gifts that truly resonate with recipients.
Challenges Ahead
Supply Chain Issues
The semiconductor industry continues to face ongoing challenges with supply chain disruptions, which have impacted global production and distribution. Factors like geopolitical tensions and resource scarcity, combined with surges in demand, could result in seasonal shortages of popular electronics. However, companies are taking steps to address these issues. For instance, Intel’s U.S.-based fabs are expected to ramp up production by 2025, potentially easing some of the supply constraints, but the full impact on holiday seasons remains uncertain.
Sustainability Concerns
While semiconductor companies are actively pursuing greener practices, such as reducing water usage and transitioning to renewable energy sources, the industry faces sustainability challenges. The high energy requirements of semiconductor manufacturing contribute to a substantial carbon footprint, which is concerning for an industry that underpins nearly every modern device. Exploring the feasibility of using recycled materials in IC packaging without compromising electrical conductivity could offer innovative pathways toward more sustainable manufacturing practices. Initiatives such as TSMC’s commitment to 100% renewable energy by 2050 and Intel’s goals for net-zero greenhouse gas emissions in its global operations highlight industry efforts, yet the journey toward full sustainability is far from complete.
This holiday season, and every season, McKinsey Electronics is committed to providing semiconductor solutions that make life better, smarter, and more sustainable. We’re proud to contribute to the technology that brings families closer, connects loved ones and creates magical moments.