The semiconductor sector has grown at 8 per cent for the past 20 years and is primed for further growth, opening up more investment opportunities as new technologies quickly come to market, according to a global shares investment manager.
Munro Partners chief investment officer Nick Griffin suggested in the area artificial intelligence (AI), semiconductors were the “new oil” and in the current era of computing, which is dominated by AI, there will be a big uptick in semiconductor demand.
“This is a time of exciting possibilities and huge investment potential via AI and machine-learning technology,” Griffin said.
“The miniaturisation of integrated circuit components and the exponential speeding up of computer power enables new technological possibilities, such as AI. This also helps to drive costs down.
“In 1971, Intel’s first chip contained roughly 2000 transistors compared to Nvidia’s latest graphics processing units, which contain 81 billion.
“These technologies enable gigantic volumes of cloud-based real-time data to be generated and manipulated from virtually unlimited connectivity. We are seeing this used in traffic lights, fridges to predictive chatbots.”
According to Griffin AI was being adopted as a “co-pilot” by consumers and industries due to its ability to be applied broadly and solve complex problems.
“[AI-generated chatbot] ChatGPT reached 100 million users in three months, being one of the fastest tech adoptions in history. To provide some perspective, it took Netflix seven years and TikTok three years to reach the same amount of users,” he explained.
He predicted the steady growth of the semiconductor industry over the past eight years was about to hit a “brewing sandstorm” of accelerated growth that would provide more investment opportunities across the sector.
“As costs continue to fall and the global appetite for high-performing computer power continues to grow, semiconductor demand is increasing exponentially,” he noted.
“For every big technology company, such as Samsung or Apple, there are dozens of providers further down the supply chain.
“As global growth investors, we liken investing in these companies to the age-old analogy of ‘selling picks and shovels to miners’.
“This brewing sandstorm of semiconductor demand will create a handful of investment champions and an open canvas for possibilities of tomorrow,” he concluded.
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