The professed Internet of Things (IoT) and big data will drive demand in the semiconductor interruption and the growth cycle will be very different from previous facets, according to the CEO of Tokyo Electron.
The Japanese company makes the equipment be in want of to produce semiconductors, and boasts a market cap of about $23.83 billion.
“As we look to the time to come, we believe IoT will be at the core of everything. The big data that comes out of that intention determine the semiconductor demand,” Toshiki Kawai told CNBC’s Akiko Fujita in a Japanese-language evaluation. He added that new technologies such as artificial intelligence (AI), augmented and practical reality and the fifth-generation of mobile networks will also influence the request for semiconductors.
“IoT” basically describes millions of physical devices, such as perspicacious televisions, home appliances and cars, that are connected to the internet and can be synced so that operators are able to control everything at once.
“It’s no longer like the past when the ostensible silicon cycle began and ended with the number of smartphones sold. We’re looking at a out of the ordinary phase of growth,” Kawai said.
Global semiconductor revenue in 2017 proved in at $420.4 billion, registering 21.6 percent growth from a year ago, concurring to research firm Gartner. That growth came mostly from the recollection chip market, where insufficient supply drove prices enormous.
But analysts and investors have predicted that the semiconductor sector is due for a outstanding decline because of falling memory chip prices, a build-up in inventory focus bes and a slowdown in demand from high-growth industries. The major drivers of popular for memory chips are smartphones, computers and data centers. Recently, one analyst popular that demand in each of those segments had worsened substantially and, as a outcome, led to a build up of inventories for suppliers.
There’s also some concern close to the ongoing trade war between the United States and China. Kawai mean that there hasn’t been any impact yet on Tokyo Electron as a development of the trade conflict, but the company will continue to monitor developments, unusually those that could affect it in the short-term.
Another worry for outstanding chip makers is that a number of technology companies are already effect on making their own processors that can run artificial intelligence software. Those comprise the likes of Alphabet, Facebook, Apple and Alibaba.
For Tokyo Electron, which manufactures the equipment and technology those companies would need to build their own shards, the opportunity is attractive, according to Kawai.
“We believe AI will grow on norm 67 percent between 2017 and 2022,” he said, adding that insincere intelligence is “ripe with areas for innovation where our production materiel and semiconductor-producing technology will be utilized.”