Ryan Li, the CEO of Lexar, says industries like AI and electric vehicles present substantial growth opportunities for the semiconductor industry
What is your outlook in terms of the future of the semiconductor business?
Certainly, so let me share a noteworthy update. This marks my first visit to Dubai, and I must commend our regional team for the commendable work done on behalf of Lexar in the Middle East and Africa. This region has emerged as the fastest-growing sector for Lexar and with ambitious targets in sight, I am confident in our team’s capabilities and the Lexar brand in this region.
When we delve into the future of the semiconductor business, which includes our involvement in the storage industry, it becomes evident that semiconductors are pivotal components for humanity’s future. The impact and popularity of artificial intelligence (AI) and electric cars are immense. Semiconductors, integral to this industry, are not only employed in traditional devices like laptops, mobile phones, and servers but are also witnessing a surge in demand from emerging industries such as AI and electric vehicles.
A series of events during the pandemic led to a semiconductor shortage situation; it was a story of higher unprecedented demand and lower supply. The good news is that the chip shortage is all but over. In fact, there may even be oversupply in the short term. However, industries like AI and electric vehicles present substantial growth opportunities.
In the electric car sector, Lexar has made significant strides, supplying millions of products to major players like BYD and the new brand Li Auto in China. This industry is projected to grow rapidly, with estimates suggesting a market size of around $600 billion last year, projected to reach $1 trillion by 2030, according to Semiconductor Equipment and Materials International (SEMI).
Given that semiconductors are designed to serve a variety of applications and functionality requirements, they exist as a diverse spectrum of products. This in turn generates additional complexity and costs for the manufacturing process and inventory management. The semiconductor market operates in cycles within the free market. Prices rise, prompting increased investment in production, resulting in oversupply, and subsequently, a price drop.
Lexar is proactive in anticipating these trends, utilizing data models and AI to make informed predictions. This approach ensures that we maintain suitable and ample supplies in every region, benefiting from market fluctuations. Additionally, companies must maintain a flexible and effective supply chain to stay agile and respond quickly to market fluctuations. This highlights the importance of striking a balance between high degrees of customization in procured semiconductor components and the optimization of the supply chain.
In short, the future of the semiconductor business promises to be bright and exciting. Regarding the past semiconductor shortage, I believe that, given the weak demand or technological advancements, such shortages may be avoidable in the future. Brands across the industry can collectively take measures to prevent a recurrence of such challenges.
What are the key drivers of the semiconductors business?
While smartphones and computers remain the strongest source of demand for chips on the semiconductor market, the growing use in other applications (e.g., in automobiles and IoT devices) has resulted in dramatic increases in overall demand for semiconductors in recent years. Demand for semiconductors is expected to increase further due to advancements in AI, blockchain, and other new technologies.
Recognizing the evolving landscape, we’ve also observed that many content creators, formerly reliant on professional cameras, now utilize phones for capturing photos and videos. In response, Lexar is actively developing cutting-edge products specifically designed for such content creators. An example is our professional PSSD, acknowledging the capabilities of the new iPhone 15, which records 4K at 60 FPS but lacks direct internal storage.
Our innovative approach includes the development of external devices to seamlessly store 4K videos while also serving as a battery backup to address potential power shortages during recording. It’s not just about introducing innovations or leading-edge technology; it’s about listening to the consumer, understanding their needs, and incorporating these insights into products that perfectly align with user requirements.
Semiconductor manufacturing is enabled by a complex global network involving a large number of the world’s countries and companies. This supply chain is comprised of multiple stages and actors, from the supply of raw materials, design, manufacturing and assembly/testing to sales. The large number of processes and international divisions of labor required in semiconductor manufacturing produce by necessity the complex, global nature of the semiconductor supply chain.
Another crucial factor that determines the growth of the semiconductor business is talent shortage. Semiconductor manufacturing requires a high degree of skills and knowledge, and the industry needs talent with specialist capabilities. However, the rapid growth of the semiconductor industry in recent years has only exacerbated the talent shortage. The shortage of engineers and other workers with technical capabilities is particularly significant, a sign of the lack of workers with specialist knowledge of the production line design, controls and other aspects of the manufacturing process.
Demand for semiconductors is surging, and each launch of a new manufacturing plant or R&D location can result in an additional crunch for talent. Talent shortages of this nature could have a substantial impact on productivity and the quality of semiconductor products.
What sort of strategies do you have for Lexar’s growth in the region?
Our strategy involves expanding into new territories every month and quarter. For instance, last year, our presence in African companies was limited, but we engaged with them, distributed products, and initiated conversations. Our coverage extends both vertically and horizontally, with recent additions of camera partners such as Canon and Fuji, reflecting our commitment to diversifying markets and revenue streams across different product categories. Previously, we sold the entire portfolio as a package, but now our focus is on each part of the portfolio with different revenue structures.
We also have a heightened emphasis on product focus, with specialised product managers for each category ensuring creativity, consumer orientation, and the necessary materials for effective sales. This approach has yielded positive results, providing our sales teams with the tools they need. In terms of expansion, we’re venturing into new countries and regions where Lexar had minimal presence before, such as Morocco and Nigeria. While Lexar has a strong history and reputation, the focus is on investing in manpower and marketing funds to strengthen our presence in diverse countries.
The second dimension of our strategy involves the fundamental aspect of products. Recognising that a brand’s foundation lies in its products, we prioritize research and development (R&D). We take pride in our professional and robust product management team that understands user needs and market demands, ensuring Lexar moves in the right direction to offer innovative solutions.
Lexar has aggressive growth plans for the Middle East & Africa market. It is the right time for us to extend our legacy of delivering superior performance in the vibrant MEA market with our range of products for all segments including gamers, videographers and content creators. Additionally, we are firming up our distribution channel with key distribution partnership agreements across the region, with a focus on improving customer service at all touchpoints. We have appointed the region’s best distributors to ensure that our products are easily and readily available at all major retail outlets and online shopping platforms such as Amazon UAE and Amazon KSA.
To complement our regional strategy, we’ve also made key management hires in recent months and opened offices in some of our major markets. Moreover, there’s been a renewed emphasis on stepping up our marketing and branding efforts in our key markets, the positive results of which we are already seeing.
Tell us about innovations Lexar has introduced in the market.
We have realized that the market for USB drives had significantly contracted, while the demand for portable SSDs had surged. Following this insight, we redirected our efforts and invested more energy and resources into planning and developing products in the portable SSD category. The focus shifted to the right products rather than a broad range. This approach focuses on what consumers want rather than fixating on competition. In our case, we concentrate on consumer preferences, a philosophy echoed in our collaboration with Nokia on the car project.
For more than 25 years, Lexar has been trusted as a leading global brand of memory solutions – so we know first-hand just how quickly data is transforming our world. Our award-winning lineup performs second-to-none and includes memory cards, USB flash drives, readers, and solid-state drives for retail and OEM customers. Whether shooting photos, capturing video or simply transferring and sharing files on the go, Lexar memory solutions provide the performance and reliability needed to get the most from your digital device.
The brand’s commitment to innovation and pursuit of combining the best in aesthetics and practical value shows through in the designs and functionality of our products. A particular emphasis on quality means that all of the sleek design and professional specs are designed to consistently bring customers unmatched performance and value.
Lexar product designs are rigorously tested with over 1,100 digital devices at the Lexar Quality Labs to assure performance, quality, compatibility, and dependability, making it one of the most uniquely designed and trusted brands in memory solutions.
Have emerging technologies such as Blockchain, AI, and so on, helped spur the growth of the storage business?
The increasing penetration of technologies such as artificial intelligence and the Internet of Things, the proliferation of smartphones and laptops and the steady decline in the prices of consumer storage devices, such as HDD and SSD, are some of the factors driving the Middle East and Africa data storage market. Further, the digitization of information in residential and commercial places, along with surging usage of mobile computing devices such as laptops, smartphones and tablets are significantly contributing to the rising demand for next-generation memory solutions that can securely store huge amounts of data, and load, reload and identify relevant data in real time.
One of the most transformative trends we’re witnessing today is the proliferation of the Internet of Things. From smart thermostats that learn our preferences to wearable devices that monitor our health, IoT is connecting the previously unconnected. Semiconductors, with their ability to process and transmit data efficiently, are at the heart of this revolution.
Additionally, the emergence of artificial intelligence (AI) and machine learning (ML) technologies is providing new opportunities for market development. These technologies aid memory chips in processing large amounts of data in less time. Moreover, the increasing demand for faster and more advanced memory chips in industrial applications will drive market growth over the forecast timeline. The global semiconductor market size was USD 573.44 billion in 2022 and is projected to reach USD 1,380.79 billion in 2029, exhibiting a CAGR of 12.2% during the forecast period.
What sort of focus does Lexar have in the gaming market?
Lexar’s award-winning product portfolio has a proven track record of allowing content creators to capture for longer while offering blazing transfer speeds to accelerate workflows. Our products are designed to enable photography and videography professionals and enthusiasts to get their best shot while allowing gamers to play at their peak without worrying about load times, stuttering graphics, or game lag.
We are diligent in working to consistently improve our storage offerings for photographers, gamers and professional content creators around the world. When it comes to the gaming segment in particular, we have a wide range of offerings, including Lexar ARES RGB DDR5 Desktop Memory, and the Professional NM1090 M.2 PCIe Gen5 NVMe SSD.
