Select the options below that best describe your investor status

Select your location  -  

Your location is pre-selected based on your location settings

You will be able to select an investor type once a location has been selected.

If none of the above applies to you, please go to our corporate site.

Clicking 'Accept and Enter' means you agree to our investing disclaimers.

Our disclaimer policy

Specific disclaimer policies will be shown here once your location and investor type has been selected.

Artificial Intelligence - Everyone's Talking About It

It is clear that AI is here to stay. If companies want to succeed, they need to adopt or enable.

Date published
20 Feb 2024
Divya Mathur, ASIP Portfolio Manager
Francesca Moore Senior Client Portfolio Manager

During a recent trip to Taiwan, companies across the technology spectrum spoke out about artificial intelligence (AI).

Divya Mathur, Emerging Markets Portfolio Manager, met many operating throughout the technology supply chain and it is clear that AI is here to stay.

If companies want to succeed, they need to adopt or enable. Within the technology sector in Taiwan, most companies are firmly in the ‘hardware’ camp which gives firms the building blocks to embrace AI.

Taiwanese companies are global leaders in technology, spanning several industry subgroups including semiconductors, hardware, electrical components, packaging/testing, and communications to name a few.

January’s presidential election did not bring any major surprises to Taiwan’s technology – like his predecessor, Lai Ching-te is supportive of cutting-edge industries, such as semiconductors and other AI enablers, but also has grand ambitions in the green/renewable energy space.

The main influence on the technology industry will be from the business cycle and when there are technology shifts. Currently we’re experiencing a cyclical recovery and new drivers of supply and demand, which will be important in determining future growth.

The shift we’re seeing includes AI, the metaverse, and blockchain, which are all being increasingly embraced by companies.

  • There has been a lot of buzz around the rise of AI and specifically Chat GPT. This has had a direct impact on some companies through the increased need for accelerated computing capacity in cloud data centres.

With companies highlighting that AI was a regular feature, what were they saying about its inclusion?

There has been a lot of buzz around the rise of AI and specifically Chat GPT. This has had a direct impact on some companies through the increased need for accelerated computing capacity in cloud data centres. However, the impact has been narrowly felt and companies outside of cloud data servicing have yet to feel any lift.

On the other hand, there is optimism and tangibility in generative AI to end user devices, such as smartphones and personal computers (PCs). This is likely to stimulate an increase semiconductor content per device. The impact is not limited to semiconductors. It will also lead to positive changes throughout the hardware ecosystem..

Including increased processing and storage capabilities, and upgrades to peripheral computing hardware devices. It may also lead more quickly to replacement cycles for improved functionality, usefulness or productivity.

An example of one such item is AI-enabled PCs. These were highly talked about during my trip, as companies highlighted that they are anticipating over 100 million AI-enabled PCs to be produced in 2025. They expect this to be supported by productivity enhancements and new applications.

Generative AI is expected to be increasingly on the edge (end user devices), supporting mobile dynamic random-access memory (DRAM) demand which is a positive for the memory market. Initially they expect this to impact high-end smartphones, then to filter through to more mid-range devices.

How does this play out in the context of the technology cycle? When should we expect to see a change in market dynamics which captures this?

Typically, you can expect that around 18-24 months after the catalyst emerges. That hardware will emerge capable of handling this evolution. In the current case, we are already riding the wave of AI and technology companies are hard at work trying to innovate and capitalise on it.

So how long will it take to see the benefits of this filter down to end markets? How will the user experience change?

That depends on which end market, but broadly speaking, companies anticipate this being as early as the first half of this year for smartphones, and ranging to later this year or 2025 for some premium smartphones and PCs.

The use-cases for AI are wide ranging and in smartphones you might expect the impact to be in areas such as multimedia content creation, fast photo/video editing, speech to text technology, or language translation.

Recent smartphone launches highlight that AI-enablement of devices is already taking place. Features such as smart searching (e.g. images), live language translation, other natural language processing, and advanced photo editing showcase the developments in AI technology which are making their way into our pockets.

In the coming years, these types of devices will become more widespread and will be the ‘go to’ during a replacement cycle. This is already driving shifts in the technology sector, creating opportunities for investors but change will not happen overnight.

Our focus on high quality companies with sustainable growth characteristics allows us to identify the long-term beneficiaries of this structural change. We are encouraged by the progress we see in this area and from the meetings we’ve had on the ground in Taiwan. We are excited for what the future holds.

Important Information

This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’), authorised and regulated by the Financial Conduct Authority. It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.

The information contained in this document has been compiled with considerable care to ensure its accuracy. However, no representation or warranty, express or implied, is made to its accuracy or completeness. Martin Currie has procured any research or analysis contained in this document for its own use. It is provided to you only incidentally and any opinions expressed are subject to change without notice.

This document is intended only for a wholesale, institutional or otherwise professional audience. Martin Currie Investment Management Limited does not intend for this document to be issued to any other audience and it should not be made available to any person who does not meet this criteria. Martin Currie accepts no responsibility for dissemination of this document to a person who does not fit this criteria.

The document does not form the basis of, nor should it be relied upon in connection with, any subsequent contract or agreement. It does not constitute, and may not be used for the purpose of, an offer or invitation to subscribe for or otherwise acquire shares in any of the products mentioned.

Past performance is not a guide to future returns.

The distribution of specific products is restricted in certain jurisdictions, investors should be aware of these restrictions before requesting further specific information.

The views expressed are opinions of the portfolio managers as of the date of this document and are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice.

Please note the information within this report has been produced internally using unaudited data and has not been independently verified. Whilst every effort has been made to ensure its accuracy, no guarantee can be given.

Some of the information provided in this document has been compiled using data from a representative account. This account has been chosen on the basis it is an existing account managed by Martin Currie, within the strategy referred to in this document.
Representative accounts for each strategy have been chosen on the basis that they are the longest running account for the strategy. This data has been provided as an illustration only, the figures should not be relied upon as an indication of future performance. The data provided for this account may be different to other accounts following the same strategy. The information should not be considered as comprehensive and additional information and disclosure should be sought.

The information provided should not be considered a recommendation to purchase or sell any particular strategy/fund/security. It should not be assumed that any of the securities discussed here were or will prove to be profitable.

Risk warnings – Investors should also be aware of the following risk factors which may be applicable to the strategy shown in this document.

  • Investing in foreign markets introduces a risk where adverse movements in currency exchange rates could result in a decrease in the value of your investment.
  • This strategy may hold a limited number of investments. If one of these investments falls in value this can have a greater impact on the strategy’s value than if it held a larger number of investments.
  • Smaller companies may be riskier and their shares may be less liquid than larger companies, meaning that their share price may be more volatile.
  • Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. Accordingly, investment in emerging markets is generally characterised by higher levels of risk than investment in fully developed markets.
  • The strategy may invest in derivatives Index futures and FX forwards to obtain, increase or reduce exposure to underlying assets. The use of derivatives may result in greater fluctuations of returns due to the value of the derivative not moving in line with the underlying asset. Certain types of derivatives can be difficult to purchase or sell in certain market conditions.

For wholesale investors in Australia:

This material is provided on the basis that you are a wholesale client. MCIM has entered an Intermediary arrangement with Franklin Templeton Australia Limited (ABN 76 004 835 849) (AFSL No. 240827) (FTAL) to facilitate the provision of financial services by MCIM to wholesale investors in Australia. Franklin Templeton Australia Limited is part of Franklin Resources, Inc., and holds an Australian Financial Services Licence (AFSL No. AFSL240827) issued pursuant to the Corporations Act 2001.

For professional investors in Canada.

This material is intended for residents in, or incorporated in, Canada and are a Permitted Client for the purposes of MI 31-103. The information on this section of the website is not intended for use by any other person, including members of the public.

Martin Currie Inc, incorporated in New York with its registered office at 280 Park Avenue, New York, NY 10017 and having a UK branch registered in Scotland (no SF000300), Head office, 5 Morrison Street, 2nd floor, Edinburgh, EH3 8BH, Tel: +44 (0) 131 229 5252 Fax: +44 (0) 131 222 2532, operates under the International Adviser Exemption with the Ontario Securities Commission (‘OSC’) and is therefore currently not required to be registered as a portfolio manager for the purposes of MI 31-103. Martin Currie Inc. is also authorised by the UK Financial Conduct Authority.

For the avoidance of doubt, nothing excludes, limits or restricts our obligations to you under the UK Financial Services and Market Act 2000, National Instruments or any other applicable law or regulation.

The opinions and views in this website do not take into account your individual circumstances, objectives, or needs and are not intended to be recommendations of particular financial instruments or strategies to you.

This website does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction. You should consult with your professional advisers before undertaking any investment activity. The information provided on this website should not be treated as advice or a recommendation to buy or sell any particular security or other investment. The information on this website has not been reviewed by any competent regulatory authority.

For professional investors:

In the People’s Republic of China:

This document does not constitute a public offer of the strategy, whether by sale or subscription, in the People’s Republic of China (the “PRC”). These strategies are not being offered or sold directly or indirectly in the PRC to or for the benefit of, legal or natural persons of the PRC.

Further, no legal or natural persons of the PRC may directly or indirectly purchase any of the strategy or any beneficial interest therein without obtaining all prior PRC’s governmental approvals that are required, whether statutorily or otherwise. Persons who come into possession of this document are required by the issuer and its representatives to observe these restrictions.

In Hong Kong:

The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

In South Korea:

This document is for information purposes only. It is prepared and presented to provide an introduction to the business of MCIM and its related companies (collectively known as ‘Martin Currie’). This document does not constitute an offer to sell or a solicitation of any offer to invest in any security, fund or other vehicle managed or advised by Martin Currie.

None of the security(ies), fund(s) or vehicle(s) managed by or advised by Martin Currie are registered in South Korea under the Financial Investment Services and Capital Markets Act of Korea and accordingly, none of these instruments nor any interest therein may be offered, sold or delivered, or offered or sold to any person for re-offering or resale, directly or indirectly, in South Korea or to any resident of South Korea except pursuant to applicable laws and regulations of South Korea.

Martin Currie is not registered with or regulated by any regulatory authorities in South Korea.