Artificial intelligence has not 'cooled down', the semiconductor chip industry is more vibrant

The AI ​​boom has not "slowed down" yet.

Last week, Bloomberg quoted information from the world's leading semiconductor chipmaker TSMC (Taiwan) saying that the group's third-quarter revenue is expected to reach NT$759.7 billion (US$23.6 billion), higher than the expected revenue of NT$748 billion and a growth of about 39% compared to the same period in 2023.

The results reflected strong demand for artificial intelligence (AI) development chips and new orders from Apple, Qualcomm and MediaTek, despite delays in shipments of NVIDIA's Blackwell chips.

This information is of great significance to the market as investors have recently been concerned that spending money on chips to develop AI technology will soon slow down due to the low practical efficiency. Some warnings also raise the issue that big tech companies such as Meta (Facebook's parent company) or Alphabet (Google's parent company) cannot maintain the current pace of infrastructure investment without achieving practical efficiency from AI that is capable of generating adequate revenue.

Thanks to the AI ​​boom, TSMC's revenue has doubled compared to 2020 - the time when OpenAI's ChatGPT launch sparked a race to invest in hardware equipment from NVIDIA to develop AI.

NVIDIA is making a killing on chips thanks to the AI ​​boom

Not only TSMC but NVIDIA is also highly appreciated by investors. In the first days of October, after a period of decline, NVIDIA's stock price returned to the record level of 135 USD. Thus, in just 1 month, NVIDIA's stock price has increased by more than 30%. However, Goldman Sachs Financial Group has just set an expectation that NVIDIA's stock price can soon increase to 150 USD when the business situation is still promising.

NVIDIA is the biggest beneficiary of the AI ​​boom, as companies like Meta, OpenAI, Alphabet, Microsoft, and Oracle continue to announce technologies and products that require major investments in graphics processing units (GPUs), where NVIDIA is dominant. In the second quarter of 2024, NVIDIA reached $30 billion in revenue, up 15% from the previous quarter and up 122% from the same period in 2023.

NVIDIA's results are expected to rise further in the rest of the year, as big tech is expected to announce AI infrastructure investment plans.

NVIDIA recently revealed that all of its Blackwell chip production - a line of advanced GPUs - for the next 12 months has been ordered.

Fierce competition

Advanced AI products like OpenAI’s ChatGPT require massive data centers filled with GPUs to perform the necessary processing, creating demand for many companies to provide AI chips. As a result, the AI ​​chip market will continue to explode and is expected to reach $500 billion by 2028, according to CNBC.

Over the past few years, NVIDIA has dominated much of the GPU market for data centers like this. This is attracting fierce competition from other companies that don't want to "have it all together."

On October 10, the world's leading chip developer, AMD (USA), launched the AI ​​chip Instinct MI325X to directly compete with NVIDIA's GPU lines. Expected to start production this year, Instinct MI325X aims to compete directly with Blackwell, which is expected to put pressure on NVIDIA's prices. Although it has not yet fully announced the orders placed, AMD revealed that both Meta and Microsoft bought Instinct MI325X, and OpenAI also uses Instinct MI325X for some applications. In addition, AMD has also announced the development roadmap for the next generations of this GPU line to increase competitiveness and meet the increasingly explosive needs of the market.

Not only giant data centers, AI laptops have also become a strong competitive target for chip manufacturers. Both AMD and Intel have recently launched new chip platforms for AI laptops. In particular, the next generation of Core Ultra from Intel is receiving many positive reviews and is expected to soon contribute to motivating this corporation to improve its business situation, which has been quite pessimistic recently.

Also in the chip race for AI laptops, Qualcomm is expected to introduce the next generation mobile platform of Snapdragon X Elite and X Plus based on ARM architecture. These competitive efforts will make the AI ​​laptop market more abundant.

Source: https://thanhnien.vn/tri-tue-nhan-tao-chua-nguoi-nganh-chip-ban-dan-them-soi-dong-185241013215247498.htm