In the coming years, the proportion of revenue from TSMC's AI processor manufacturing is expected to steadily increase.
It is anticipated that the contribution of AI revenue to the foundry's overall revenue will rise rapidly from single digits to around 25% within 5 years. In comparison, the outlook for Intel's data center AI-related products remains to be clarified by the management team.
When TSMC recently revised its semiconductor outlook, CEO C.C. Wei stated that while smartphones are growing steadily and PCs are recovering slowly, High-Performance Computing (HPC) and AI applications are leading the trend. But what about Intel's outlook for AI PCs in its core consumer CPU business? Is the PC still in a slow recovery phase?
According to reports from Chinese media outlets such as IT Home and Seeking Alpha, in Intel's pursuit of AI, instead of competing head-on with rivals like Nvidia and AMD in the cloud domain, it might be more prudent to seize a foothold in the more promising AI PC field.
Since 2023, Intel CEO Pat Gelsinger has emphasized the company's strategy and alliances in the AI PC domain in several earnings calls. Particularly on April 18th, despite not being present in person, Gelsinger reached out to Chinese customers through video as Lenovo launched its 2024 China AI PC initiative in Shanghai.
As one of the pioneering enterprises in AI PCs, Intel officially introduced the Intel Core Ultra processor series in 2023 and, through this series and its partners, released over 100 AI PC products.
Michelle Johnston Holthaus, Intel executive vice president and general manager of the Client Computing Group, appeared at the Lenovo Innovation and Technology Conference, expressing confidence in the AI PC market. She confirmed that shipments of the Core Ultra processor exceeded 5 million units, with China contributing 40% of the share.
Since the US-China tech war in 2018, Intel's revenue contribution from the Chinese market has been approximately 30%. The proportion of Core Ultra processor shipments to China also reflects the company's reliance on the Chinese market in the client department.
Holthaus admitted that AI PCs are still in the early stages, but the demand for AI computing power is expected to increase further in the future. This will likely accelerate the upgrade of Intel processors, especially as demonstrated at the Vision 2024 conference in April, where the next-generation Lunar Lake processor was showcased to have superior AI performance compared to the current Meteor Lake. Lenovo is naturally one of the first partners for the Lunar Lake platform.
However, Intel's accidental disclosure of the latest Core Ultra processor shipments to the Chinese market further reflects its high dependence on the demand momentum in the Chinese market for the AI PC battleground. Whether the future of AI PCs in the Chinese market will be hindered by geopolitical factors remains to be seen.
In particular, US congressional members previously expressed strong opposition to Huawei's new generation AI PCs featuring Intel's latest processors, criticizing the US Department of Commerce for giving the green light to Intel's exports to China.
However, Huawei's notebook and tablet products already have different series equipped with either Intel CPUs or their own Kirin processors. Nevertheless, whether the Core Ultra products, which are regarded by the public as AI PC processors, will cross the red line of US export controls or even land on Washington's regulatory radar remains uncertain for Intel.
