AI technology to spur semiconductor makers
KUCHING: Amid a downturn in the global semiconductor industry last year, the industry is now in frenzy over Chat Generative Pretrained Transformer (ChatGPT), which could potentially revolutionise semiconductor manufacturing as the sprawling influence of artificial intelligence (AI) reshapes industries from logistics, education and healthcare to automotive and manufacturing.
Analysts from Public Investment Bank Bhd (PublicInvest Research) believe that the Malaysian technology sector could see robust job orders going forward as more investments will be poured into AI-related products.
Recently, ChatGPT, an AI chatbot has been dominating global headlines, while also sparking a tense clash between Google and Microsoft, two of the world’s largest tech companies.
ChatGPT is developed by San Francisco-based startup, OpenAI, which was co-founded in 2015 by Elon Musk and Sam Altman and is backed by Microsoft.
Generative artificial intelligence is a technology that uses machine learning to create new content, based on simple instruction.
ChatGPT is one example of text-to-text Generative AI. There are also text-to-image, text or image-to-video, text-to-music and numerous other projects. It is starting to look like 2023 may be the year when AI goes mainstream.
“Companies like ABB, Nvidia and Dynatrace are already developing AI applications to make industries like healthcare, education and manufacturing more efficient and responsive,” PublicInvest Research noted.
“Further, AI requires large amounts of data to be processed and high-performance hardware to train models. Digital data is currently growing at +60 per cent per annum, fueling massive demand for cloud computing.
“On the other hand, the generation of grammatically correct, human-like written text by AI applications can be used to make social engineering attacks such as phishing or business email, compromising scams harder to detect and remove.”
As a result, corporate cybersecurity budgets will continue to rise. Gartner expects information security spending to reach US$187 billion as companies raise their outlay, including on AI-augmented security tools, to fend off new cyberattack tactics.
In-short, growth in expenditure on AI, cloud and cybersecurity are expected to post strong earnings growth for the leading companies in these sectors.
According to Nikkei Asia, the major US chip equipment suppliers are shifting operations from China to Southeast Asia in a sign that US export controls enacted last October are accelerating the decoupling of tech supply chains between the world’s two largest economies.
“Applied Materials, Lam Research and KLS, which collectively own about 35 per cent of the global market share for chip production equipment, have been increasing their production capacity in Southeast Asia or relocating their workforce from China to Singapore and Malaysia since October.
“We believe the relocation of major semiconductor players to Malaysia will see more global semiconductor companies following their footsteps.”
The shift not only helps increase job orders for local players, PublicInvest Research said, but also helps widen the scope of the semiconductor value chain in Malaysia, which has a strong foundation in back-end assembly and testing services as well as a large pool of automation equipment suppliers in assembly and packaging, as well as test and vision inspection.
“We think there will be more potential developments especially in the front-end wafer fabrication and fabless deign fields, which can help widen Malaysia’s semiconductor value chain.”