Advantest CEO Warns of Semiconductor Challenges

Doug Lefever, CEO of Advantest, warns that a slowdown in investments by major tech companies in data centers could lead to a 'vicious' downturn for the semiconductor industry, which heavily relies on these investments. However, he believes that the potential rise in demand for artificial intelligence-enabled smartphones could act as a buffer against such a downturn, particularly if a 'killer app' emerges that drives mass adoption. Lefever noted that any reduction in spending by hyperscalers like Meta, Google, and Microsoft could have significant ripple effects throughout the semiconductor supply chain. Although current demand for AI smartphones is slow, it may surge if the right technology becomes widely available. Advantest, which dominates the semiconductor testing market, has seen its share price soar due to increasing complexity and demand for chips. The overall sentiment in the industry remains cautious as the potential for cyclical downturns looms amidst the high concentration of investments in AI infrastructure.