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The Changing Landscape of Business Risk

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The Changing Landscape of Business Risk

The Changing Landscape of Business Risk

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In the modern era, the pace of business is fast – but the pace of technological change is even faster.

As a result, the landscape of business risks is constantly shifting and changing, and both entrepreneurs and investors need to be on top of the potential factors that could disrupt their chances of success. At the same time, they also need to be prepared to address and mitigate new risks as they crop up.

Today’s Biggest Risks

Today’s infographic comes to us from Raconteur, and it highlights the forces that have been shaping the business risk landscape – both today and as projected for the future.

Using data from the 2017 Global Risk Management Survey done by insurance company Aon, it shows the top business risks according to 1,843 risk decision-makers from 33 industry sectors in over 60 countries.

Here were the top risks from 2017, as well as the corresponding portion of business leaders that said they were prepared for each risk:

Rank (2017)Business RiskReadiness
#1Damage to reputation/brand51%
#2Economic slowdown/slow recovery30%
#3Increasing competition45%
#4Regulatory/legislative changes44%
#5Cybercrime, hacking, viruses, malicious codes79%
#6Failure to innovate/meet customer needs59%
#7Failure to attract or retain talent57%
#8Business interruption67%
#9Political risk/uncertainties27%
#10Third-party liability70%

The insurer noted that many of these top business risks were uninsurable – and that in general, that such risks are continuing to gain precedence.

Future Business Risk

Interestingly, the survey also asked respondents to predict the risks in 2020 based on current trends and conditions.

Here is the same list, but for 2020, including the current ranks as well:

Rank (2020)Business RiskPrevious Rank (2017)
#1Economic slowdown/slow recovery2
#2Increasing competition3
#3Failure to innovate/meet customer needs6
#4Regulatory/legislative changes4
#5Cybercrime, hacking, viruses, malicious codes5
#6Damage to reputation/brand1
#7Failure to attract or retain talent7
#8Political risk/uncertainties9
#9Commodity price riskn/a
#10Disruptive technologies/innovationn/a

Damage to risk/brand fell out of the top spot all the way to #6, and two new entrants appear for the first time: commodity price risk and disruptive technology/innovation.

Cybercrime Overconfidence

Raconteur’s infographic also points to the biggest long-term risks to business, and the risks that get the most underestimated. These both come from a 2018 report by German asset manager Allianz, which includes opinions from a selection of risk experts.

The Biggest Long Term Risks
1. Cyberincidents
2. New technologies
3. Climate change/increasing volatility of weather

The Most Underestimated Risks
1. Cyberincidents
2. Business interruption
3. New technologies

As you’ll notice, the risk of “cyberincidents” tops both lists.

This is particularly interesting, because in the previous survey of business leaders, the potential business risk of “cybercrime, hacking, viruses, and malicious codes” was the one that leaders said they were most prepared for, with a 79% readiness level.

Yet, cyberincidents – which have an estimated annual impact of $450 billion per year – are both the top long-term risk and the most underestimated risk according to risk experts in the Allianz report.

Could business leaders be overconfident about this kind of threat?

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Ranked: Largest Semiconductor Foundry Companies by Revenue

Most of the 10 largest semiconductor foundries in the world, are headquartered in just three Asian countries, accounting for 90% of the entire industry’s revenue.

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A cropped chart showing the largest semiconductor foundry companies by their percentage of global revenues in Q1 2023.

Ranked: Largest Semiconductor Foundry Companies by Revenue

They’re in our phones, cars, planes, and even fridges.

Semiconductor chips have become critical for the modern way of life, and the biggest semiconductor foundry companies rake in billions of dollars from widespread demand.

This chart shows the largest semiconductor foundry companies by their percentage of global revenues in Q1 2023, using data sourced from Trendforce.

ℹ️ We highlight data for companies that only operate foundries (fabrication plants) that manufacture chips for clients, also known as a “pure-play” foundries, as well as companies that design and manufacture their own chips, known as integrated device manufacturers. “Fabless” manufacturers that only design and don’t manufacture their own chips are not included.

Semiconductor Foundry Companies by Revenue

At the top of the list and dwarfing every other company by revenue share is TSMC which earned 60% (or nearly $17 billion) of the entire industry’s revenue in Q1 2023.

Founded in 1987, TSMC is a pure-play foundry that has become Taiwan’s largest company and manufactures products for a host of clients including Apple, NVIDIA, and AMD.

RankCompanyCountryRevenue
(Q1 2023, USD)
1TSMC🇹🇼 Taiwan$16,735M
2Samsung🇰🇷 South Korea$3,446M
3GlobalFoundries🇺🇸 US$1,841M
4UMC🇹🇼 Taiwan$1,784M
5SMIC🇨🇳 China$1,462M
6HuaHong Group🇨🇳 China$845M
7Tower Semiconductor🇮🇱 Israel$356M
8PSMC🇹🇼 Taiwan$332M
9VIS🇹🇼 Taiwan$269M
10DB Hitek🇰🇷 South Korea$234M
Other$556M
Global Total$27,860M

Note: Revenue based on the following conversion rates: USD 1 = WON 1,276; USD 1 = NTD 30.4.

Well behind TSMC in foundry revenues is integrated device manufacturer Samsung, the biggest company in South Korea, which made $3.4 billion (12.4% of the industry’s revenue) from its semiconductor manufacturing business.

GlobalFoundries from the U.S., UMC from Taiwan and SMIC from China round out the top five, with each taking home around 6% of industry’s revenue share in Q1 2023. The former spun out from AMD’s manufacturing arm when the company went fabless in 2009.

Industry concentration is apparent in semiconductors. For example, the top 10 semiconductor foundry companies account for 98% of the entire industry’s revenue. Furthermore, 90% of the market is dominated by companies in just three Asian countries: Taiwan, South Korea, and China.

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