The semiconductor industry might find a safeguard against potential market volatility through AI-enabled smartphones, according to the CEO of the world’s leading chip testing equipment manufacturer.
Doug Lefever, chief executive of Nvidia supplier Advantest, has expressed cautious optimism about the sector’s future while monitoring any indicators of decreased AI spending by major US technology companies. The current heavy investments in data centres by Meta, Google, and Microsoft have created a concentrated market that could face significant disruption if spending patterns shift.
The testing giant’s leader warns of possible “vicious” market cycles, though he hesitates to label the current situation a bubble. “When that next cycle comes, it could be pretty vicious,” Lefever noted, whilst highlighting the potential stabilising force of AI smartphones in the market.
Tokyo-based Advantest, which controls more than half of the semiconductor testing market, has witnessed its share price surge by over 80 per cent in the past year. The company’s testing processes have become increasingly crucial, with advanced chips now requiring 10 to 20 testing cycles, compared to single-digit tests just five years ago.
The complexity of modern chips has dramatically increased testing durations, with Nvidia’s latest Blackwell processor requiring three to four times longer to test than its predecessor. This heightened demand for testing services prompted Advantest to raise its net income target for the 2024 fiscal year by 16 per cent to ¥122bn.
Despite recent geopolitical tensions and US restrictions on China’s advanced technology access, Advantest maintains a robust market position. The company continues to generate 20-25 per cent of its revenue from China, demonstrating resilience in the face of global semiconductor industry challenges.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.