Mostly from what I've seen, custom hardware is being replaced by off the shelf components with customizable software.
Yes, I have this trend over the last ten years and accentuated over the last five years.
The 1990's was the golden age of the IC startup. Many many companies were designing their own chips as a result of new tools and the new decoupling of design and manufacturing.
But as we moved through the 2000's, the cost of a developing a new chip rose astronomically. This is due to a combination of the need to make much more complex chips to be competitive and greatly increasing cost to gear up manufacturing at smaller geometries.
Thus chip startups needed a lot more money. This was a hard sell because it became clear in the mid 2000's that overall venture investment in chip startups produced negative returns.
It got worse in more recent times. Quick turn Internet startups could turn an idea into revenue very quickly with small teams and negligible investment in infrastructure. This is very attractive to investors. Why spend tens of millions and wait years for a hardware idea to bring in revenue when software could turn around so much faster and cheaper?
Thus, the way to survive in hardware to do as little hardware as possible (no chips!) and push the secret sauce to software, ideally not even in your device.
Meanwhile, the established companies are no longer pressured by startups to do many new designs. Further they have to front the enormous cost when they do make new chips.
Instead of expansion, we are seeing a wave of consolidation in the chip world.