Taiwanese IC design companies are diving into data centers.
They have long been competitive in consumer electronics. However, the opportunities for Taiwanese IC designers have become quite limited with cloud AI rising to prominence. Whether it is high-speed computing or high-speed transmission, US companies seem to be dominant in the field.
In cloud computing processors and AI accelerators, US businesses such as Nvidia have set up enormous competitive barriers. In Taiwan, even though some startups are deeply engaged in AI accelerators to capture market demands Nvidia cannot cover, most IC design companies can only develop their businesses on peripheral chips.
As for the field of data centers, some Taiwanese IC designers have more room for development, including companies like Weltrend Semiconductor, which develops fan motor driver ICs. These companies enter the data center market through motor demands in air and water cooling systems. In addition, some companies are involved in PMICs (Power Management Integrated Circuits), with DDR5 PMICs being a relatively accessible entry point for achieving results.
However, in recent months, some new progress has been made, especially in high-speed transmission, which has become a critical area for companies to actively deploy. Leading companies such as MediaTek and its subsidiary Airoha, along with Realtek, Parade Technologies, and ASMedia, have all made progress in this area.
The importance of high-speed transmission in the cloud AI domain has rapidly increased in recent months. Major companies like Nvidia, Intel, AMD, and Broadcom have all highlighted the significant impact of related technologies on enhancing cloud computing performance, bringing competition over transmission standards into the spotlight.
Competition in high-speed transmission interfaces is also heating up. US company Astera Labs continues strengthening its technical cooperation with major Taiwanese server manufacturers. Meanwhile, MediaTek is expanding its emphasis on its SerDes technology, which will be a crucial driver of business growth in its ASIC business.
According to sources familiar with cloud AI-related industries, it is not easy for Taiwanese companies to enter the high-speed transmission field. Both Cloud Service Providers (CSPs) and main chip platform providers have long-term collaborations with existing American partners, making it challenging for newcomers to compete in terms of experience and trust.
Furthermore, the certification difficulty from CSPs is very high. For Taiwanese companies to penetrate this market, it requires at least three years of effort. On the other hand, in pure technical strength, American companies are stronger in network communication and high-speed transmission than their Taiwanese counterparts, necessitating a catch-up mentality for Taiwanese firms.
It is reported that MediaTek is leveraging its SerDes technology through its ASIC business to expand its business scope from the confirmed customer Google to other CSPs to compete with US network chip companies like Broadcom and Marvell. Mediatek subsidiary Airoha plans to enter the market through optical module-related chips in the data center domain.
On the other hand, Realtek aims to enter the data center market indirectly with its Ethernet-related chip technology, starting with entry-level product lines. As for high-speed transmission interfaces, companies like Parade Technologies and ASMedia are actively seeking entry points, hoping to challenge AsteraLabs' dominant position.
Article translated by Heidi Yin-Hsuan Tai
