The more AI, the more advanced: How can high-tech hardware manufacturing seize opportunities to achieve growth and profitability?

With the widespread application of AI technology, the demand for high-performance computing has surged, driving the semiconductor industry to continuously develop more efficient and low-power chips. At the same time, the development of cloud computing and the Internet of Things (IoT) has also put forward higher requirements for data centers and smart devices, further accelerating the progress of semiconductor technology. In this mutually reinforcing ecosystem, high-tech hardware manufacturers face enormous market opportunities, but also need to address various challenges such as supply chain management, talent shortages, and IT infrastructure upgrades.

According to a survey by Oxford Economics, up to 81% of mid sized hardware manufacturers have achieved positive revenue growth in the past three years. However, behind these seemingly impressive data, we found that only 67% of companies reported profit growth during the same period. This indicates that although the overall market performance is strong, many companies have failed to effectively improve their profitability while pursuing revenue growth.

So, how can high-tech hardware manufacturing companies seize the business opportunities brought by this AI led technological revolution, drive business growth, improve profitability, and maintain long-term competitiveness?

Focusing on Business Growth: Multi dimensional Efforts to Promote Development Together

For various small and medium-sized enterprises, accelerating business growth is undoubtedly the top priority. For hardware manufacturers, this is particularly important. They tend to prioritize increasing market share, attracting new customers, and improving profit levels as their main goals for the next two years (Figure 1).

Therefore, many managers have taken measures to improve the after-sales invoicing process, enhance financial settlement capabilities, etc., in order to achieve cost reduction and efficiency improvement through refined management; At the same time, many companies are committed to expanding their product delivery scope and striving to cover a wider market area.

Addressing labor and IT challenges: building a talent pool and upgrading technology platforms

With the acceleration of industry development, professional talents who master hardware manufacturing skills have become increasingly scarce. 45% of companies find it difficult to find suitable talent to maintain daily operations, while 43% face the challenge of retaining excellent employees.

In addition, outdated IT infrastructure poses a significant threat to the high-tech industry, such as the inability to scale processes and systems to support natural business growth, which has become the biggest pain point for IT infrastructure; Secondly, it is unable to assist managers in making adjustments or redefining plans based on the latest information or changes in priorities, resulting in delayed order delivery and causing customer dissatisfaction. Some business managers also pointed out that due to the flaws in the old system, they need to manually perform a large number of low value repetitive tasks (Figure 2).

Because of this, enterprises urgently need to take effective measures to innovate outdated systems and automate business processes, ensuring the ability to quickly collect and use actionable data.

Embracing New Technologies: AI Helps with Intelligent Transformation

Many managers have stated that they are actively addressing IT infrastructure issues. More than half of the respondents stated that embracing new technologies such as AI will bring competitive advantages to businesses in the coming years (51%). To successfully adopt new technological achievements, a solid cloud foundation is first necessary.

Cloud solutions accelerate the pace of automation, while artificial intelligence will further advance the automation process. In terms of AI applications, high-tech manufacturers are far ahead. According to surveys, more than one-third of high-tech manufacturers have adopted AI technology (34%), and another half plan to join this ranks in the next year. With the power of AI, not only can breakthrough progress be made in supply chain management, customer service, and other areas, but it can also help companies fill talent gaps and reduce the impact of talent shortages (Figure 3).

The key to truly leveraging advanced tools such as AI lies in accurately managing massive amounts of data. Unfortunately, currently less than half (42%) of high-tech hardware companies are using data management or analytics solutions.

In order to change the current situation, enterprises must handle valuable operational and customer information in a more cautious and responsible manner, strengthen investment in data management and analysis solutions, better integrate internal and external resources, promote the large-scale creation of new business models, create consistent employee experiences, and achieve real-time KPI insights and other functions.

The GROW with SAP solution provides a highly integrated end-to-end business process management platform for high-tech hardware manufacturing enterprises, covering all aspects from research and development design, supply chain management to production manufacturing and financial management. This solution achieves seamless data sharing across departments, improves transparency and collaboration efficiency throughout the entire process, thereby reducing information silos and enhancing production efficiency. Its agile delivery and flexible configuration options support rapid prototyping and market response, shortening the product development cycle. In addition, GROW with SAP cloud architecture provides great business flexibility, allowing enterprises to expand functional modules according to their needs without the need for large-scale IT investment, effectively controlling costs and responding to market fluctuations.

So…

In the pursuit of business growth, high-tech industry manufacturers face many challenges. However, by upgrading IT platforms and digitizing business across the entire enterprise, business leaders can eliminate low value tasks, improve efficiency, and achieve profitable growth, thereby surpassing competitors. After achieving digitization, these enterprises can have a more comprehensive grasp of actionable data and maintain a leading position in competition!

*This article’s survey data is sourced from Oxford Economics Research Institute

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This article "The more AI, the more advanced: How can high-tech hardware manufacturing seize opportunities to achieve growth and profitability?" by AcloudEAR. We focus on business applications such as cloud ERP.

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