Only a few Taiwanese IC design firms are reaping the benefits from the current cloud AI trend driven by the rise of generative AI, according to industry sources.
Nvidia's latest financial report and financial forecast show that the cloud AI trend is still going strong. AI GPUs continue to be in short supply, which for an otherwise weak semiconductor industry, makes AI the only bright spot.
The Taiwanese IC design houses hoping to catch up with the cloud AI trend are mostly IP companies and design service companies, such as Global Unichip (GUC), AIchip Technologies, and Andes Technology. MediaTek's ASIC business is rumored to have entered Google's AI chip supply chain, but an obvious injection into its operations has yet to be seen.
Generally speaking, Taiwanese IC design houses have yet to successfully enter supply chains for other peripheral ICs related to AI servers, such as network ICs, high-speed transmission ICs, and power management ICs (PMIC).
While current cloud AI opportunities may be out of reach for Taiwanese companies, that does not mean Taiwan is out of the AI chip game, according to industry players.
Taiwanese IC design firms maintain a very optimistic outlook on the growth potential of AI development and its associated business. Some companies even believe that Nvidia's AI GPU shipment performance and AI opportunities would not be as strong if it were not for the rapid rise of generative AI.
Customer demand for edge AI applications is also quickly rising, but it will take time for business opportunities to be truly realized. Overall economic conditions must first recover to a certain extent before higher specification and higher price AI-related products can be launched en masse.
Sources familiar with the AI chip industry said that Taiwanese IC design houses have put all their effort into AI technology over the past year, understanding that the evolution of AI algorithms is very fast. If a certain technological foundation is not established early, it would be very difficult to catch up later once edge AI is popularized.
Nowadays, all companies are introducing some degree of AI computing in their products to increase their value. For example, MediaTek recently announced it will use the Meta Llama 2 large language model (LLM) to compete in the AI computing field.
Customers are happy to see more IC design companies introduce AI algorithms into their products and modules. The expectations for AI in the consumer market are much higher now, with consumers looking to see what AI applications new products can provide, while brands are looking to use AI to provide more services to boost sluggish buying sentiment.
IC design firms stated that consumer expectations for AI functionality will quickly go from optional to standard, and market competition will stem from the actual experience of using these AI functions, which is a positive trend for overall IC design in the development of AI technology.
Article translated by Eifeh Strom
