EU 2024 Market Outlook

2024 Market Outlook – Navigating transitions. Seizing opportunities.

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AI WILL TRANSFORM THE GLOBAL LANDSCAPE --------------- Technological innovations over the years have triggered new waves of globalisation. It has not only led to the rise in the digital workforce in the manufacturing and services sectors but also a rise in overall productivity. Equally, advancements in technology can replace jobs and lead to economic problems. The current buzz is over Generative Artificial Intelligence (AI) and how it will be the next game changer for globalisation. Generative AI technologies have the potential to transform or disrupt many industries, which have profound implications for productivity, growth, and profitability. Moreover, open-source AI models are more affordable and accessible than proprietary ones and as such likely to become more popular in the future. Advancements in AI are very much dependent on high-end semiconductor chips which have the power to process and analyse data. In Asia, the clear beneficiaries are Taiwan and Korea. Taiwan has the full industrial supply chain to support current and future AI industry trends. Taiwanese companies that manufacture key components such as thermal/power/printed circuit boards, etc. can also benefit by providing a complete component supply chain. Korean fabs that are developing the

next generation High Bandwidth Memory chip will also benefit from the widespread adoption of AI. Other Asian companies within the semiconductor supply chain such as advanced packaging and testing players in Malaysia should also benefit. Generative AI can be used in fields such as content creation for games, movies, music, virtual reality (VR) and augmented reality (AR), etc. It can also stimulate the development of cloud computing and edge computing, and reshape industries outside of tech. These include transport (driverless cars) and healthcare (virtual doctors), education (personalised learning) and retail (inventory management). These new application areas will create additional demand for memory semiconductors. Asian gaming companies, electric vehicle manufacturers, e-commerce players and cloud providers are embracing Generative AI to enhance their offerings and improve their competitive edge.

Global Generative AI market

Size, by component, 2022 - 2023 (USD billion)

151.9

160

140

112.1

120

100

85.3

80

67.0

51.0

60

42.7

33.6

40

24.8

13.9 17.7

10.6

20

0

2022

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Software

Services

Source: Market US report as of October 2023.

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