I read the data published by the Japan Semiconductor Equipment Association, which

I read the data published by the Japan Semiconductor Equipment Association, which was a medium-term forecast for Japanese semiconductor rose sales and demand. Japanese companies often set goals for the medium-term outlook every three years, but this also provided data on the medium-term outlook for 24-26.

Japan is one of the countries with a high share of semiconductor equipment in the world, and naturally, various semiconductor equipment from Japanese companies is needed to make semiconductors as the semiconductor cycle improves.

First of all, semiconductor investment is expected to recover in 2024, and sales are expected to increase by 15% year-on-year to 4.2522 trillion yen. When it comes to year 24, it can be considered that it means April 24 to March 25.

The cycle is expected to continue in 25 years, with sales of 4.67 trillion yen, up more than 10 percent from 24 years ago, especially as solid investments are expected in foundry and memory as a whole. The amount is around 42 trillion won in won.

In 26, it was predicted that the demand effect of AI-related semiconductors would increase by 10% to 5.14 trillion yen.

The table below shows the demand forecast data for semiconductors and FPD, but since FPD has a small volume, it would be okay to just look at the semiconductor flow. Anyway, it seems that the cycle was slightly bent in 23, but it is rising again from 24, and this good trend will continue until 26.

Due to falling memory prices, the global semiconductor market in 2023 showed a four-year decline cycle, but in 2024, the memory market was expected to rise and recover both in price and quantity. More than double digits are expected to increase in 25.

The memory market has been recovering for four consecutive quarters since the first quarter of 23, and although there has been no significant movement in the number of PCs and smartphones sold so far, the supply-demand relationship is also improving as there is a movement to end production cuts in terms of wafer inputs.

As for servers, GPUs for AI servers are in very good demand, and HBM is also continuously in high demand. Hynix is also flying into this very HBM

In the data, it was expected that the movement of AI functions to be installed not only as servers but also as PCs or smartphones themselves in the form of on-device will accelerate. To do this, the device itself must implement advanced AI processing with its own CPU or GPU, and low power consumption must be realized.

One of the reasons I’m very curious about the specifications of the iPhone 16 series that will be released this fall is that Apple’s first on-device AI iPhone will be available. AI can be implemented on its own only when a good device that can use power efficiently without being slow is released.

The minimum system requirement based on AI PC is that DRAM is over 16GB and SSD is over 256GB. The trend is that even higher specifications will be required because it is the minimum requirement.

The impact of on-device AI on the semiconductor market is expected to be very positive, and the cycle of hardware replacement will be accelerated, and in the case of AI servers, various semiconductors optimized for AI functions are expected to emerge in the future.

GPUs for AI servers, which are currently in demand for specific companies, are also expected to gradually expand their options, and investments in data centers are expected to be made not only for AI purposes but also for renewal, including general-purpose servers.

In terms of semiconductor manufacturing equipment, the US tightened public regulations in October 2022, and export management regulations began in Japan in July and the Netherlands in September 23. Japan’s semiconductor equipment also slowed down for a while due to its small sales in China, but as a result, it is producing solid sales. As investment increases in countries other than China, China’s share is expected to gradually decrease.

The reason why Apple’s stock price is showing a good rise these days is that it will eventually lead the demand for replacement because it will require the latest hardware devices to take advantage of this AI, and in that sense, the overall activation of the semiconductor market, including Japan’s semiconductor equipment, is expected.

I wonder if the iPhone 16 series will be an all-time hit.

The global semiconductor market is said to be aiming for $1 trillion in 2030 in a 23-year $526.8 billion market. Japan’s semiconductor equipment market, which occupies the major semiconductor equipment sector, is also expected to grow high in the medium term. Come to think of it, I should buy more Nikkei ETFs in my spare time. lol

Investment and growth are certainly beneficial, but the Japan Semiconductor Equipment Association also predicts that related sales will exceed 4 trillion yen in 24 years, so it will grow from 4 trillion yen to 5 trillion yen in just two years. It seems to see the magic of welfare, in which the period of seed growth decreases as the mass increases.

It would be good to keep an eye on whether the AI-triggered semiconductor upward cycle can actually continue as expected and increase the stakes of good companies from time to time!