Chipmakers need to start serving their robot overlords Opinion

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It’s starting to look like smartphones are no longer the ever-reliable driver of global semiconductor demand.

For the past decade, it was those touch-screen, Internet-connected, selfie-taking devices that propped up the industry as the appetite for computers declined.

STMicroelectronics NV on Jan 25 added to the chatter when it pointed to “unfavourable seasonal dynamics for smartphone applications” in forecasting a dip in revenue and profitability. To be clear, smartphone seasonality is expected in the industry and analysts at Natixis SA were quick to respond to the Swiss firm’s fourth-quarter results and first-quarter outlook in a positive tone.

But put together, a comment here and a hint there, the larger picture is starting to become clear. Texas Instruments Inc this week gave a disappointing sales outlook, blaming makers of communications equipment and some personal electronics.

Cars and appliances are being automated thanks to the advent of AI software and chips. In China, a growing power in this field, the government has singled out specific companies for special treatment because of their development of AI semiconductors. Such technology underpins the move by firms like Hangzhou Hikvision Digital Technology Co beyond simple surveillance cameras and into real-time facial recognition and tracking.

For chipmakers – from Texas to Geneva – it’s obvious the smartphone gravy train is starting to slow. Now they just need to figure out how to satisfy those robot overlords.