The Biden administration is reportedly implementing new export controls on essential technologies, such as quantum computing and semiconductor materials, in response to China’s progress in the global chip market
These controls encompass quantum computers and their components, sophisticated chipmaking tools, semiconductor technologies, certain metal and metal alloy components and software, and high-bandwidth chips, which are vital for AI applications.
While the U.S. intensifies its measures to curb China’s expansion, there is noticeable hesitancy within the global industry.
The U.S. Department of Commerce issued new regulations on Friday, 6th September 2024, encompassing quantum computers and their components, sophisticated chipmaking tools, certain metal and metal alloy components and software, as well as high-bandwidth chips, which are vital for AI applications.
To put this figure into some perspective, the loss is comparable to the GDP output of a small country, such as Norway, Singapore, or the UAE, for example.
Global semiconductor stocks experienced volatility on Tuesday following a decline in Nvidia’s shares from the previous trading sessions.
Shares of chip firms in Europe and Asia fell in early trade as investors reacted to Nvidia losing more than $500 billion in market capitalization over three trading days. Some of the stocks recouped losses, however, as shares in the U.S. chipmaking giant recovered around 6 – 6.5% as of Tuesday 25th June 2024.
This follows a significant drop in Nvidia’s share value, which fell 13% over three consecutive sessions from the record highs achieved on Thursday 20th June 2024.
On Monday 24th June 2024, Nvidia’s stock closed down 6.7%, marking its second-largest decline of the year, yet the shares began to recover in early trading on Tuesday 25th June 2024.
Last week, the company surpassed Apple and Microsoft to become the most valuable U.S. company, achieving a market capitalization of over $3.4 trillion. However, by the end of Monday, Nvidia’s market value had declined by more than $540 billion from its intraday record on Thursday 20th June 2024.
Nvidia reported that the demand for its highly sought-after artificial intelligence graphics processing units (GPUs) continues to be strong.
Companies such as Microsoft, Google, Amazon, and Meta are investing billions of dollars in these chips to enhance their data centres and cloud services.
Kneron, a startup specializing in artificial intelligence chips, unveiled its latest products on Wednesday 4th June 2024.
The company aims to exploit the growing world-wide interest in AI and provide an alternative to industry heavyweights such as Nvidia and AMD.
The company, headquartered in Taiwan and supported by American semiconductor leader Qualcomm and major iPhone assembler Foxconn, introduced the KNEO 330, its second-generation ‘edge GPT’ server.
GPT, short for generative pre-trained transformer, is an AI algorithm trained on vast datasets capable of generating text and images, with OpenAI’s ChatGPT being the world leader right now.
ThousandEyes, Cisco’s internet monitoring division, has introduced a new suite of AI-driven features known as Digital Experience Assurance, or DXA, on Tuesday 4th June 2024.
The firm asserts that this new AI technology will allow customers to not only monitor but also automatically address issues affecting network quality.
Describing itself as the ‘Google Maps’ of the internet, Cisco ThousandEyes offers a comprehensive, end-to-end perspective of every user and application across all networks.
Established 15 years prior, the company has been heavily investing in AI technology in recent years.
ThousandEyes is now implementing significant AI-centric modifications to its platform, which are designed to enhance its clients’ oversight of network quality and robustness.
Nvidia has revealed its latest generation of AI chips, coming just months after the release of its preceding model.
This rapid succession underscores the intense competition within the AI chip market and Nvidia’s relentless effort to maintain its leading position.
CEO Jensen Huang has now committed to unveiling new AI chip technology annually, accelerating the company’s prior biannual pace. The latest AI chip architecture, named ‘Rubin,’ is set to follow the ‘Blackwell’ model announced in March 2024, which is currently in production and anticipated to be delivered to customers the latter part of 2024.
Huang’s unveiling of the Rubin has seemingly hastened Nvidia’s already rapid AI chip development.
Nvidia has committed to launching new AI chip designs annually, a cadence Huang reportedly referred to as a ‘one-year rhythm‘ during his Sunday 2nd June 2024 announcement. Previously, the company was committed to updating its chips every two years. But such is the speed and fierce competition of AI development, that original decision has become quickly out-dated.
The swift transition from Blackwell to Rubin, taking less than three months, highlights the intense competition in the AI chip market and Nvidia’s race to maintain its leading position.
AMD and Intel are two major competitors playing catch-up in the AI race.
Arm, with a 90% holding by SoftBank, is reportedly set to establish an AI chip unit with the goal of developing a prototype by spring 2025.
This initiative is aimed at catching up with the booming AI market, currently dominated by Nvidia.
Arm, alongside competitors such as AMD, Intel, and Qualcomm, is accelerating efforts to gain position in the AI sector.
SoftBank is negotiating with contract manufacturers, including Taiwan’s TSMC, to produce the AI chips. Mass production is expected to commence in autumn 2025.
Arm’s shares have surged by nearly 45% this year, bringing its market capitalization to over $113 billion.
The chip designer based in the U.K., plans to create an AI chip unit to develop a prototype by spring 2025.
Discussions are reportedly ongoing with contract manufacturers like Taiwan’s TSMC for the production of the AI chips. It was reported that production is anticipated to start in fall 2025.
Arm is responsible for designing the core architecture for these chips. The company licences its designs to companies including Qualcomm and Nvidia and earning royalty fees from each sale. The company asserts that 99% of high-end smartphones utilize Arm technology.
Ambition
Established by Japanese billionaire Masayoshi Son, SoftBank is heavily investing in AI. The company has new plans to allocate $960 million by the following year to enhance its generative AI computing capabilities. In June 2023, Son expressed SoftBank’s ambition to occupy a leading role in the AI revolution.
Reportedly, SoftBank aims to establish AI data centres equipped with proprietary chips throughout the U.S., Europe, Asia, and the Middle East by 2026.
For the fiscal year concluding in March 2024, SoftBank recorded a 7.24 billion Japanese Yen ($4.6 billion) profit in its Vision Fund.
This was the first profitable year for the principal tech investment division since 2021.
Scientists have recently achieved a remarkable breakthrough by creating pure silicon, which could pave the way for quantum computing
The world’s purest silicon
Researchers have developed an ultra-pure form of silicon, known as silicon-28 (Si-28), which is fundamental for ‘silicon-spin qubits’ in quantum computers. This advancement addresses a major challenge in quantum computing: the ‘fragile quantum coherence.’
Quantum computers tend to accumulate errors quickly due to slight environmental changes, affecting their dependability.
Quantum bits, or qubits, are analogous to classical computer bits but are extremely sensitive to environmental interference.
Technical
Current quantum computers, even when cooled to near absolute zero, can only maintain error-free operation for a very short time.
This new technique generates qubits by embedding phosphorus atoms into crystals of pure, stable silicon. A concentrated silicon beam then directs onto a silicon chip, replacing impurities with pure silicon.
As a result, the impurity levels in silicon have been significantly reduced, from 4.5% to a mere 0.0002%.
David Jamieson, a project co-supervisor from the University of Melbourne, mentioned that the team achieved this level of purity using a standard piece of equipment – an ion implanter – that’s typically found in semiconductor fabrication laboratories.
Richard Curry, a professor at The University of Manchester where extensive research took place, believes that this advancement could accelerate the development of operational quantum computers. Processes that might have taken a decade to complete could now be accomplished in potentially half that time or less.
Potential impact
Practical quantum computers have the potential to revolutionize numerous fields
Energy Optimization: They can solve intricate problems related to energy.
Artificial Intelligence: Quantum computers may significantly boost AI capabilities.
Drug Discovery: They could expedite drug development and molecular simulations.
Communication: They can enhance encryption and communication protocols.
The creation of the world’s purest silicon represents a significant step forward in the development of large-scale quantum computers.
Samsung Electronics anticipates its profits for the first quarter of 2024 to surge more than tenfold compared to the previous year.
This projection is due to the recovery in chip prices following a post-pandemic decline and a surge in demand for artificial intelligence (AI) related products.
As the world’s leading manufacturer of memory microchips, smartphones, and televisions, the South Korea-based Samsung reportedly plans to publish a comprehensive financial report on 30th April 2024.
Projected profit
The tech giant has projected that its operating profit for the January-March 2024 quarter soared to 6.6 trillion won ($4.9bn; £3.9bn), marking a 931% increase from the same period in 2023, surpassing analysts’ forecasts of approximately 5.7 trillion won.
Rebound in microchip prices
A rebound in global semiconductor prices, following a significant downturn the previous year, is expected to bolster its earnings. Over the past year, global memory microchip prices have reportedly increased by about 20%. The semiconductor division of Samsung typically generates the most revenue for the company.
The demand for semiconductors is projected to stay robust throughout the year, fueled by the expansion in AI technologies. Furthermore, the earthquake that struck Taiwan on 3rd April 2024 could potentially constrict the worldwide chip supply, possibly enabling Samsung to further elevate its prices.
Taiwan a key player
Taiwan houses several key chipmakers, including TSMC, which supplies Apple and Nvidia. Despite TSMC reporting minimal impact on its production from the earthquake, it did experience some operational disruptions.
Additionally, Samsung is poised to benefit from the sales of its newly launched flagship Galaxy S24 smartphones, introduced in January.
Intel’s stock dropped by 4% during extended trading on Tuesday 2nd April 2024, following the disclosure of long-anticipated financial details for its semiconductor manufacturing division, often referred to as the foundry business, in a filing with the SEC.
The company reportedly disclosed that its foundry business incurred an operating loss of $7 billion in 2023, against sales of $18.9 billion. This represents a greater loss compared to the $5.2 billion operating loss reported by Intel for its foundry business in 2022, which had sales of $27.5 billion.
This is the first time that Intel has disclosed revenue totals for its foundry business separately. Historically, Intel has both designed its own chips as well as its own manufacturing and reported microchip sales to investors.
Other American semiconductor companies such as Nvidia and AMD design their microchips but send them off to Asian factories such as Taiwan’s TSMC for manufacturing.
Amazon Web Services (AWS) announced Trainium2, a chip for training artificial intelligence (AI) models, and it will also offer access to Nvidia’s next-generation H200 Tensor Core graphics processing units.
Amazon’s AWS cloud department of the encompassing Amazon empire has announced new chips for customers to build and run artificial intelligence (AI) applications on, as well as plans to offer access to Nvidia’s latest chips.
Amazon Web Services is attempting to stand out as a cloud provider with a variety of cost-effective options. It won’t just sell cheap Amazon-branded products, though. Just as in its online retail marketplace, Amazon’s cloud will feature top-of-the-line products from other vendors, including highly sought after GPUs from top AI chipmaker Nvidia
Amazon’s dual-pronged approach of both building its own chips and letting customers access Nvidia’s latest chips might will help it against its top cloud computing competitor, Microsoft.
Nvidia stock closes at all-time high, a day before earnings
Shares of Nvidia closed up 2.3% at an all-time high of $504 on Monday 20th November 2023. The record comes ahead of the company’s Q3 results due Tuesday 21st November 2023, when analysts are expecting to see revenue growth of over 170%.
And, if that’s not enough, the forecast for Q4, according to some analysts, is likely to show a number close to 200% growth.
Nvidia is still by far the market leader in GPUs for AI, but high prices and competition are fast becoming an issue.
Can Nvidia continue the AI ride and hold this remarkable market share position?
Nvidia shares rose 4.2% Tuesday 29th August 2023 to close at a record high, after the company announced a partnership with Google that could expand distribution of its artificial intelligence technology (AI).
The stock’s bountiful run continued, now up 234% in 2023, making it by far the best performer in the S&P 500. Facebook parent Meta is second in the index, up 148% so far this year.
The record close comes less than a week after the company said quarterly revenue doubled from a year earlier and gave a forecast indicating that sales this period could rise 170% on an annual basis. The day after the better-than-expected earnings report, the stock climbed to a record intraday high of $502.66 before declining later in the afternoon.
Nvidia’s business is booming because its graphics processing (GPU’s) are being gobbled up by cloud companies, government agencies and startups to train and deploy generative AI models like the technology deployed in OpenAI’s ChatGPT as fasta as Nvidia can make them.
NVIDIA stock chart
Nvidia announcment
On Tuesday 29th August 2023, Nvidia CEO Jensen Huang appeared at a Google conference to announce an AI agreement between the two companies.
Through the partnership, Google’s cloud customers will have greater access to technology powered by Nvidia’s powerful H100 GPUs.
‘Our expanded collaboration with Google Cloud will help developers accelerate their work with infrastructure, software and services that supercharge energy efficiency and reduce costs’, the Nvidia CEO reportedly said in a blog post.
Nvidia’s GPUs are also available on competing cloud platforms from Amazon and Microsoft.
Technology giant Nvidia reports its sales have hit a record after more than doubling as demand for its artificial intelligence (AI) chips take off!
It figures
The company says revenue jumped to above $13.5bn (£10.6bn) for the three months to the end of June. Nvidia also expects sales to perform very well in the current quarter and plans to buy back $25bn of its stock. The firm’s shares rose by more than 6.5% in extended trading in New York, adding to their huge gains this year. Nvidia also said it expects revenue of around $16bn for the three months to the end of September 2023.
That is substantially higher than Wall Street expected and would equate to a rise of around 170%, compared to the same time last year.
Even before 23rd August’s figures, Nvidia’s stock price had more than tripled for the year, making it the top performer in the S&P 500. It’s share price jumped to around $500 after hours, a level that would mark a record if it closes there on 24th August 2023. Its prior closing high was $474.94 on 18th July 2023.
‘A new computing era has begun’, Nvidia’s chief executive, Jensen Huang, said in a statement. ‘Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI’, he reportedly added.
Strong performance
The strong performance was driven by Nvidia’s data centre business, which includes AI chips.
The power of Nvidia’s AI microchips
Revenue for that unit came in at more $10.3bn, a rise of more than 170% from year ago, as cloud computing service providers and large consumer internet companies snapped up its next-generation processors.
This year, Nvidia’s stock market value has jumped to more than $1 trillion as its shares more than tripled in value, mking it the fifth publicly traded U.S. company to join the so-called ‘Trillion dollar club’, along with Apple, Amazon, Alphabet and Microsoft.
AI ‘mania’ helps Nvidia
Nvidia have been making micro chips for a long time and it’s only really been in the last couple of years that the market has caught on.
Nvidia was originally known for making the type of computer chips that process graphics, particularly for computer games. They have been making chips for a long time and have now become the leader in AI chip design and manufacture.
Now Nvidia’s hardware is the foundation for most AI applications, with one report suggesting it had cornered 95% of the market for machine learning.
ChatGPT which generates human-like responses to user queries within seconds was trained using 10,000 of Nvidia’s graphics processing units clustered together in a supercomputer belonging to Microsoft.
AI products are expected to dramatically change how we use computers and the role they play in our lives.
