The following is a comment written by Ikou Misa, a personal blogger operating the blog "IA Workshop," as a Fisco social reporter. Fisco is committed to actively collaborating with individuals who disseminate information, aiming to provide a more diverse range of information to investors.

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[2025 DX Evolution - 7 Perspectives]

We have entered an era of digital industrial revolution driven by DX (Digital Transformation) innovations across various industries, and in 2024, attention focused especially on semiconductor stocks supporting the evolution of DX, led by Nvidia. As DX evolves within various industries, we cannot afford to ignore these trends this year. I would like to highlight cutting-edge companies in some industries experiencing intense innovation driven by DX, linked to IoT, Semiconductors, and AI.

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1. Agriculture/Poultry Farming DX Perspective

The innovation brought about by DX in industries that industrialize food and animals is remarkable.

In Agriculture, DX utilizing AI through robots and drones is gradually being realized, managing soil moisture, monitoring the health of farmland, optimizing Agrochemicals and irrigation, observing plant growth conditions, forecasting crop yields and risks of diseases, etc.

In livestock farming, with the trend towards large-scale ranching, each individual animal and device is assigned an ID, and various sensors are attached to monitor activities such as feeding management, breeding, from insemination to birth, and health management utilizing AI to understand behaviors, leading to the spread of digital transformation.

Agrist , which provides smart agriculture packages, has developed "AGRIST AI" to predict crop yields, supporting agricultural management by setting optimal fertilization and irrigation amounts to achieve high-precision yield forecasting. AGRIST AI is supported by Microsoft's powerful Azure platform and Copilot's AI capabilities.

Iwabuchi Livestock supports livestock farms that produce the brand beef "Shiawase Kizuna Ushi" in Chiba Prefecture by utilizing digital transformation. In the company's dairy division, they fully utilize robots and digital transformation to pursue the deliciousness of milk through methods of feeding, management of nursing and milking, health management based on the behavior tied to IDs, and raising management during childbirth.

2. The perspective of medical digital transformation

The COVID-19 pandemic has significantly advanced digital transformation in the medical field.

Telemedicine and AI drug discovery have become major topics of discussion.

There are challenges in overcoming difficult diseases and speeding up drug development, but M3 <2413> offers a service called "Chiken-kun" that supports the entire process of clinical trials. Sony Group <6758> collaborates with M3 to support welfare services such as online health consultations and physician referrals.

Otsuka Holdings <4578> Otsuka Pharmaceutical has begun to narrow down promising compounds utilizing AI in collaboration with a UK company, aiming to speed up drug discovery and reduce research costs.

3. Perspective of Mainland Education DX

Schools and the education industry, which were the most lagging in innovation, are finally beginning to move toward the ultimate educational methods tailored to individual abilities. Overcoming the pandemic, universities are advancing the use of online classes, learning management, and communication with students through Learning Management Systems (LMS). It seems that the efficiency of education will improve as teaching materials and conversation exchanges are automatically generated based on learning history in accordance with progress and grades.

• Plus Alpha Consulting <4071> is not only increasing its customers for the integrated school management system "Yorisoru" and supporting the reform of working styles for faculty and staff, but also provides personality diagnostic functions for learners and faculty as well as early detection functions for school refusal.

• Benesse focuses on the "ability to question" and "ability to discern" for the advanced use of AI, striving to enhance the quality of learning by achieving more personalized responses.

• The Duolingo app from Duolingo is the most downloaded language learning app in the world. It has also released a feature that allows enjoyable conversation practice in a role-playing format using a generative AI language model.

4. Perspective of Smartphone/AI Semiconductors

In realizing DX concretely across various industries, smartphones, which are widely distributed worldwide with about 1.5 billion units, will be greatly utilized as tools for customer service. The evolution of the semiconductors inside smartphones and the applications caused by AI are the key to DX. Establishing a value chain related to smartphones and semiconductors, including materials, assembly, and applications, is a major challenge and is also intertwined with geopolitical struggles.

For each company, collaboration strategies from the perspective of the value chain for succeeding in Business are becoming increasingly important.

Sony Group Corp <6758> is mass-producing image sensors for Apple and other smartphones, while also strengthening its collaboration with TSMC that has expanded to Kumamoto.

Japanese companies have strengths in smartphone electronic components. The performance of companies like Sony Group Corp <6758>, TDK <6762>, Kyocera Corporation Sponsored ADR <6971>, and Murata Manufacturing Co., Ltd. <6981> is influenced by their collaboration with smartphone customers.

Materials, manufacturing equipment, and inspection devices used in semiconductor processes are also strong points for Japanese companies, including Shin-Etsu Chemical Co., Ltd. <4063>, SUMCO <3436>, Tokyo Ohka Kogyo Co., Ltd. <4186>, Disco Corporation <6146>, and Advantest Corporation <6857>.

All are exploring optimal supply systems for customer factories located in China, Taiwan, and South Korea.

5. Perspective on Tourism DX

Providing ultimate services is a major indicator for winning in the tourism industry, and preparations for implementing Tourism DX to achieve that ultimate service are underway.

The application Plaru, provided by Plaru Co., Ltd. , which automatically generates travel plans using AI, is interesting. It automatically generates travel plans based on conditions such as location, time, and desired places.

Hoshino Resorts <3287> aims for ultimate service and has made it possible for users to perform a tailored hotel diagnosis suitable for their purpose through simple questions on its website.

Oriental Land Co., Ltd. Unsponsored ADR <4661> includes various services in the 'Tokyo Disneyland Resort App' for visitors. In particular, efforts have been made to overcome the significant challenge of waiting times, and such attention to detail seems to be contributing to repeat visits.

6. The perspective of the Automobile Industry / MaaS.

In 2024, discussions about the slowdown in plans for the EV shift have become a topic of interest, but in the long term, the flow from engines to hybrid cars and then to EVs will not change. While monitoring that situation, the further digitalization developments for MaaS, including Self-Driving Cars, must not be overlooked. The essence of MaaS is to optimize all forms of transportation, and optimization through Self-Driving Cars will be a significant factor. The development of DX/AI technologies supporting these changes is accelerating. Therefore, it is essential to recognize that each company involved in the value chain of the massive Automobile / MaaS industry is entering a significant transformation period, and how to respond to this transformation is crucial. Furthermore, the significant trends in communication technology, AI Semiconductors, and Power Semiconductors that form the basis of this transformation should not be overlooked.

The Self-Driving Cars concept from Sony Group Corp <9984> has become a topic of conversation. They focus on AI-related patents and investments, proposing Self-Driving Cars Level 6 with an increased emphasis on safety.

DENSO <6902>, in response to the trend towards MaaS / Self-Driving Cars, aims to expand its semiconductor business beyond its role as an automotive components supplier for the Toyota Group <7203>. They are also considering the development of efficient SiC Power Semiconductors for controlling EV propulsion and suitable semiconductors for generative AI used in Self-Driving Cars.

Mitsubishi Electric Corp. Unsponsored ADR <6503>, the world's fourth-largest in Power Semiconductors, is collaborating with Nexperia to co-develop energy-efficient SiC Power Semiconductors and is coordinating on their supply structure.

7. The perspective of Neuroscience / AGI.

Elon Musk is pursuing dreams from Tesla to space development, then to AI companies and internal microchips. The first topic in the book 'Ten Future Predictions Discussed by University Professors' is the download of human functions. Advances in neuroscience and the evolution of AGI (General AI and Strong AI) along with wireless charging technology are opening the path toward the realization of internal microchips.

In Sweden, it is said that the number of people passing through ticket gates with ID chips inserted at the base of their thumb has exceeded 3,000. Alphabet's subsidiary Verily and Vivokey Japan have started the business of implanting microchips in the body in Japan. In the future, businesses for internal microchips are likely to develop, starting with payments, then moving to health management and human enhancement. It will be interesting to see which Japanese companies take this area seriously.

While several examples of companies leading the way with seven DX perspectives have been mentioned, other promising companies driving DX are also emerging. Attention should be paid to where the rapid trend of DX will be seized and which companies will survive.

Author: Ikuo Misa

Blog Name: "IA Workshop"

Reference: "100 Scenery Changed by DX" (Written by Yuichi Morito)

"10 Future Predictions Discussed by University Professors" (Editor: Yurlina Takiguchi)

"Connecting Neuroscience" (Editor: RIKEN)

"Geopolitics of Semiconductors in 2030" (Written by Yasuhiko Ota)

The battle involving Semiconductors that supports the backbone of DX in 2024 (FISCO article: Ikuo Misa).

Company websites, news articles, etc.