Semi­con­duc­tor mak­ers boosted by AI trend

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai [email protected]­nadaily.com.cn

The in­creas­ing com­mer­cial­iza­tion of artificial in­tel­li­gence is set to give China a sub­stan­tial boost in the global semi­con­duc­tors field, say in­ter­na­tional re­searchers.

Rev­enues from semi­con­duc­tors man­u­fac­tured in China will grow by 25 per­cent to ap­prox­i­mately $110 bil­lion in 2019, as pro­duc­ers meet the in­creas­ing do­mes­tic de­mand for chipsets, fu­eled in part by AI ad­vances, said con­sul­tancy Deloitte Global in an an­nual in­dus­try pre­view re­leased on Tuesday.

A Chi­nese chip foundry will be­gin pro­duc­ing semi­con­duc­tors spe­cial­ized to sup­port AI and ma­chine learn­ing tasks, thanks to mas­sive do­mes­tic de­mand and the tech­no­log­i­cal might of do­mes­tic tech gi­ants, said Chris Arken­berg, a re­search man­ager with Deloitte’s Cen­ter for Tech­nol­ogy, Me­dia and Telecom­mu­ni­ca­tions.

“China is per­haps bet­ter po­si­tioned now than ever be­fore to be­come a glob­ally com­pet­i­tive player in both semi­con­duc­tors and AI … be­cause lead­ing dig­i­tal busi­nesses (in China) have sig­naled that greater do­mes­tic self­sup­ply of semi­con­duc­tors is a vi­tal com­po­nent of their fu­ture,” he said.

For in­stance, China’s tech­nol­ogy trio, namely Baidu, Alibaba and Ten­cent, hold stakes in more than half of China’s 124 uni­corn star­tups, in­clud­ing SenseTime, the world’s most valu­able pure-play AI com­pany.

“They are spend­ing and hir­ing ag­gres­sively to cre­ate on­shore man­u­fac­tur­ing ca­pa­bil­i­ties ap­proach­ing those of the top global foundries,” Arken­berg noted.

Bei­jing’s Hori­zon Ro­bot­ics, founded by the for­mer head of Baidu’s In­sti­tute of Deep Learn­ing, sup­plies em­bed­ded chips for ma­chine vi­sion and is work­ing with ma­jor au­to­mo­tive brands to pro­vide edge pro­cess­ing with ma­chine vi­sion for ve­hi­cles.

An­other no­table Chi­nese chip player, Cam­bri­con, also has a line of chips spe­cial­iz­ing in supporting ma­chine learn­ing tasks, con­tribut­ing de­sign sup­port for AI in Huawei’s Kirin smart­phone chipset and then de­liv­er­ing its own ma­chine learn­ing so­lu­tions for data cen­ters.

The mas­sive troves of data in the Chi­nese mar­ket will help to im­prove the pre­ci­sion and ac­cu­racy of al­go­rithms, thus fu­el­ing the devel­op­ment of AI chips, said Roger Chung, Deloitte Re­search TMT se­nior man­ager.

In an­nounc­ing the de­ci­sion to es­tab­lish a ded­i­cated chip com­pany in Oc­to­ber, Zhang Jian­feng, chief tech­nol­ogy of­fi­cer of Alibaba, at­trib­uted the tech giant’s unique po­si­tion to lead break­throughs in chips to its “ad­van­tages in al­go­rithm and data in­tel­li­gence”.

AI is likely to be­come a spring­board for China’s semi­con­duc­tors in­dus­try in the long term, given the mas­sive troves of data gen­er­ated in var­i­ous sce­nar­ios and the rel­a­tively eas­ier ac­cess to them, said Bill Lu, a Hong Kong­based man­ag­ing di­rec­tor in re­search at UBS.

“China’s top in­ter­net play­ers have the big­gest com­mand of con­sumer data and are bet­ter po­si­tioned to bear the ever-in­creas­ing mar­ginal costs to cap­ture new cus­tomers,” Lu said.

Ad­vances in AI are one of the driv­ing forces for the global semi­con­duc­tor in­dus­try with an an­tic­i­pated 5 to 6 per­cent growth rate over the next two decades, said Mor­ris Chang, founder of Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co, in Septem­ber.

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