The Next Big Theme: February 2021

Internet of Things

Surging Demand Sparks Semiconductor Sales Growth

Semiconductors are indispensable when it comes to the evolution of emerging technologies such as the Internet of Things, cloud computing hardware, autonomous vehicles, industrial automation, and others. As these themes accelerate, so does the demand for semiconductors. Taiwan Semiconductor Manufacturing, an industry leader supplying the likes of Nvidia, recently announced that it expects US$25-US$28 billion in capital spending in 2021, representing at least 47% growth versus 2020.1 The announcement comes during a period of global semiconductor supply shortages. The shortages have forced many auto companies to halt or slow vehicle production. Semiconductors have become a necessity for the vehicle industry with the growing pervasiveness of electronic features such as Bluetooth connectivity, driver assist, navigation and hybrid electric systems. Beyond the automotive industry, Apple found itself needing to push its latest launch date back by months due to the shortage.2

Artificial Intelligence

Image Recognition Accuracy Recognises a New Upper Bound

Google Brain research scientist Quoc Le has released a new milestone for ImageNet, a database used in visual object recognition. Image recognition technology has been paramount to the success of Artificial Intelligence (AI). A new semi-supervised learning method will allow an increase in the accuracy of the model to 90.2%, up 1.6% from previous limits.3 Image recognition technology continues to improve, pushing the boundaries of AI. For example, facial recognition has come to serve a new purpose within the “new normal” of face coverings amid the pandemic. Advanced facial recognition for people wearing masks has been developed at Japanese biometrics firm NEC Corporation with 99.9% accuracy.4 The technology allows safe entry and exit systems for companies, educational institutions, public facilities, commercial facilities, event venues and theme parks.

Video Games & Esports

Video Games Don’t Stop Even Amid Re-Opening Economies

Activision Blizzard’s franchise, Call of Duty, continues to show strong engagement even as we re-open our economies. Combined monthly active users (MAU) during December 2020 on Modern Warfare/Warzone and Black Ops Cold War totalled 66 million people across PC, console, and mobile.8 The figure easily exceeds the second closest video game, Minecraft, with a total MAU of 39 million. These numbers show that video game engagement remains at elevated levels, even beyond the stay-at-home economy experienced earlier in 2020. With new video game consoles continuing to hit the market, momentum may continue in 2021.

Wellness & Digital Health

Online Therapy Offers a Pandemic Coping Mechanism

Mental health is one area of medicine quickly transitioning to virtual care. In the stages before the pandemic, telepsychiatry was gaining traction but only adopted by a relatively small group of people. The trend is accelerating rapidly, however, with the American Psychiatric Association reported members utilising tele-psych soared to 84.7% from just 2.1% prior to Covid-19.9 Although largely the result of unique circumstances, this transition has shown patients and providers the added benefits such as convenience, time, and costs, as well as and continual therapist-patient relationships.


Robots Employed in the Battle Against Covid-19

COVID-19 poses risks to employee health who still need to conduct their work on-site. To combat these risks, many manufacturers are turning increasingly to robotics to limit human-to-human interactions. Companies order 9,972 robots in the fourth quarter up 64% year-over-year.10 Beyond the pandemic, manufacturers are becoming increasingly enamoured with automation due to advancements in computer vision, mobility and end-of-arm tools for grabbing objects. With these advancements, robots can take on an increasing work-burden, such as handling upwards of 1,300 packages an hour at FedEx locations. Workers on the other hand are focusing on more complex tasks, such as correcting addresses and dealing with delays, resulting in greater robot versus human specialisation and reducing costs.11


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This document is not intended to be, and does not constitute, investment research as defined by the Financial Conduct Authority