AI Boom Set to Propel Semiconductor Industry Growth

Demand for chips designed for artificial intelligence is poised to drive growth in the semiconductor industry over the coming years, according to Scientech CEO Hsu Ming-chi in an interview with Bloomberg Television.

The company head noted that the global chip market has grown by approximately 8% annually over the past two decades, and artificial intelligence is set to significantly accelerate this pace. Scientech is a major supplier to Taiwan’s semiconductor giant TSMC.

“This AI industry boom has only just begun. The volume of equipment sold to the most renowned company has likely doubled or tripled over the year,” he remarked.

Hsu anticipates an increase in his firm’s product sales in the latter half of 2024. He expressed confidence in the launch of numerous AI applications in the future.

Scientech manufactures equipment that TSMC uses to produce chips for various companies like Nvidia, which are in high demand in the artificial intelligence sector.

His comments followed the release of Nvidia’s report, which led to a 7% drop in its shares in after-hours trading.

Subsequently, the chipmaker recorded its largest single-day decline in history amid reports of a U.S. Department of Justice investigation. The company denied the claims.

Hedge fund Elliott Management argues that Nvidia is “in a bubble,” and the AI technology underpinning its stock valuation is “overinflated.”

In June, the company became the most valuable in the world with a market capitalization of $3.34 trillion.

Earlier, a growing group of Wall Street analysts expressed concern over massive investments in AI, which they fear could lead to a financial bubble. They worry that the technology may not generate sufficient profits to justify the billions invested.