KUALA LUMPUR (May 8): The global semiconductor industry is expected to rebound this year, driven by demand for generative artificial intelligence (AI), with the industry’s upcycle likely to continue until 2025 or 2026, said Nomura Asset Management.
The anticipation was based on previous semiconductor cycles that lasted 26 to 52 months, averaging 40 months, said Takeshi Kawamoto, a senior equity analyst at Nomura Asset Management UK, during the Nomura Asset Management Malaysia Breakfast Conference 2024.
This follows a challenging 2023, where the industry witnessed an 8.2% year-on-year decline in sales, reaching US$527 billion.
However, the World Semiconductor Trade Statistics (WSTS) anticipates a significant rebound in 2024, with global sales expected to rise 13.1% to US$597 billion.
This uptrend will be driven by the increasing demand for powerful chips to handle complex AI tasks, particularly in generative AI applications, he said.
Additionally, the semiconductor content continues to increase in a broad range of products, including in electric vehicles (EVs), which is another growth driver.
He projected that the industry will expand “at least two times the global gross domestic product rate” and hit more than US$1 trillion by 2030.
Malaysia needs upskilling push to capitalise on growth cycle in semiconductor industry
Meanwhile, Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai emphasised the need for Malaysia’s semiconductor industry to move up the value chain, focusing on areas such as integrated circuit (IC) design and advanced packaging that will allow the country to capitalise on the industry’s growth cycle.
He also highlighted the importance of attracting talent and fostering upskilling through improved technical and vocational education and training (TVET) programmes.
Meanwhile, Nomura Asset Management Malaysia managing director and country head Leslie Yap remains optimistic about the semiconductor industry’s long-term prospects.
He sees strong long-term growth potential led by AI, personal computing, smartphones, memory data centres, Internet of Things (IoT), EVs and semiconductor capital equipment.
“These would potentially offer opportunities amid the continued advancement of technology. As the investment landscape evolves, we remain at the forefront, committed to uncovering these investment opportunities to ensure our clients stay ahead of the curve and are well-positioned to capitalise on emerging trends,” Yap said.