According to semiconductor trade statistics, 2017 will be the strongest market since 2010 easily recording double digit gains causing the SOX Semiconductor Index to outpace NASDAQ and the other indexes. The question Wall Street people have now is: How much longer will semiconductors be an attractive investment? That question was answered at this year’s Global Semiconductor Alliance Executive Forum: Enabling a New Revolution. The US Executive Forum is an invitation-only event attended by the leading semiconductor executives from around the world. You can see a list of attendees HERE if you don’t believe me. The next big event is the famed GSA Awards Dinner hosted by Wayne Brady!
Gene Munster, Managing Partner Loop Ventures, kicked it off with a “Creating New Markets” keynote including his top technology breakthroughs: Zeplin (transportation), Movie Projector (media), Internet (business communication), Smartphone (personal communication). Gene went through 115 slides in 15 minutes but really the focus was on AI which includes robotics, automotive, augmented reality, and virtual reality as AI interfaces. Gene mentioned that if you are weirded out by any of this you are too old, which, as a father of four millennials, I agree with completely. This is a young person’s game, if you want to add value, lead or stay out of the way. Gene also stated that AI was mentioned by 11% of S&P 500 companies during recent investor calls. I would bet that number is much higher for semiconductor investor calls.
I have Gene’s slide deck if you want to discuss it in more detail in the comments section.
There was a “5G – The Next Generation” session with Jean-Francois Hebert of Dassault, Cristiano Amon of Qualcomm, Robert DiFazio of Interdigital Labs, Shireen Santosham of The City of San Jose, and Preet Virk of MACOM, which was very interesting. 5G is discussed at just about every conference I have attended this year but when I ask, very few people know the difference between 5G and 4G in regards to transmission rates. 5G is 10GBPS versus 4G at 100MBPS. If you recognize how profitable 4G has been for semiconductors, you can multiply that by 100x for 5G, my opinion.
The next session: AI for Real! was the best example of the future opportunity for semiconductors in a 5G world. David Edelman, former Obama Technical Advisor (MIT), Paul Daughtery, Accenture CTO, and Mark Papermaster, AMD CTO, presented slides. Afterwards the panel discussion was moderated by Aart de Geus, Chairman and Co-CEO, Synopsys.
David made some very strong points: AI is everywhere and nowhere meaning that AI touches all of our lives today whether we recognize it or not and will continue to do so on a very large scale. David also quoted futurist Arthur C. Clarke’s third of his famous three laws, “Any sufficiently advanced technology is indistinguishable from magic” and AI certainly is modern day magic.
There was also a lot of discussion on how AI will change jobs and the skill levels of American workers. The consensus was that the skill level will increase as will the acceptance of AI and new technologies. Again, I have the slides and can talk more in the comments section.
Bottom line: Whatever AI and the future holds it will certainly have an insatiable compute and storage demand in both the cloud and edge devices. This heavy demand will continue to drive the semiconductor industry and specifically the SOX for years to come, absolutely.