[News] NVIDIA Supplier Advantest: AI Phones May Sustain Chip Industry amid Declining Data Center Investment

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According to Liberty Times, citing Financial Times, major tech companies have significantly increased capital expenditures in recent years to acquire AI chips and build data centers. However, global investment in data centers has recently slowed, raising concerns about whether the AI boom might be losing momentum.

In response, Advantest, the world’s leading semiconductor testing equipment manufacturer and a key supplier to NVIDIA, highlights that the demand for AI phones could sustain the semiconductor industry’s growth and help mitigate the impact of declining investment in AI data centers, as the report notes.

The report cites Advantest’s CEO, Douglas Lefever, who identifies AI smartphones as a new growth driver for the industry. While demand for these devices is currently modest, Lefever suggests that it could increase rapidly, noting that if AI smartphones achieve breakthrough functionalities and spark a wave of device upgrades, the market could see an explosive trend.

According to TrendForce, the rising popularity of AI is shifting the smartphone market’s focus toward AI smartphones. TrendForce projects that AI smartphones will account for 10% to 15% of total production in 2024.

Lefever, in his interview with the Financial Times, mentions that companies such as Meta, Google, and Microsoft have been significant investors in data centers, and he has been closely monitoring signs of slowdown in AI-related spending among these U.S. tech giants. Lefever indicates that this decline might be temporary and could rebound quickly.

Nonetheless, he warns that any slowdown in AI data center investment, given the high concentration of hyperscalers in the market, would have a notable impact on the supply chain.

The report also touches on the growing demand for semiconductor testing equipment. Lefever points out that each chip now undergoes multiple tests during the manufacturing process, typically requiring 10 to 20 tests, compared to only few tests just five years ago. This trend underscores a sharp rise in demand for testing equipment and highlights the increasing importance of quality control in semiconductor production.

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