Chip Demand Will Surge From 2024, Tokyo Electron CEO Says
(Bloomberg) -- The semiconductor industry will return to an exponential growth path next year despite lingering inflationary and geopolitical uncertainties, according to machinery maker Tokyo Electron Ltd.
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Looking past the current nadir, Chief Executive Officer Toshiki Kawai said long-term trends like autonomous driving and metaverse development will supercharge demand for data storage and processing capabilities.
“The amount of data the world must deal with will grow tenfold by 2030 and then hundredfold by 2040,” 59-year-old Kawai said in an interview. “For a while now, people have been talking about us living in a big-data era — but if you ask me, I still think we’re in a small-data era.”
Tokyo Electron may face headwinds, however, from US-China tensions, which recently swept up Japan and the Netherlands in a push to curb exports of advanced chips and chipmaking technology into China. The details of what export controls Japan may adopt are not yet known, but the Tokyo company’s business is likely to be directly impacted and it presently gets more than 20% of its sales in China.
“Chips are in need everywhere, including China, Japan, the US and Europe,” Kawai said, declining to comment specifically on any potential trade restrictions. “So long as we continue to be the global number one, we should always be able to find business in one way or another. That’s our stance.”
Still, his view may prove overly rosy if current downtrends extend longer than expected or China export controls are too onerous, Iwai Cosmo Securities analyst Kazuyoshi Saito said.
To craft the cutting-edge chips of the future, Tokyo Electron customers will have to adopt new processes in their production lines — such as silicon wafer bonding — and that’s where the company believes its machinery has an advantage. Tokyo Electron will command a larger share of the chipmaking equipment market in the years to come, its CEO said, pointing to the deployment of bonding technology in future stacked-memory architectures that would allow more data to be stored in smaller packages.
Kawai’s comments are in line with what the world’s biggest contract chipmaker, Taiwan Semiconductor Manufacturing Co., said when reporting earnings in January.
“We forecast the semiconductor cycle to bottom sometime in first half 2023, and to see a healthy recovery in second half this year,” TSMC CEO C.C. Wei said.
--With assistance from Debby Wu.
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