What’s next in chips

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What’s next in chips

By James O’Donnell | MIT Technology Review | May 13, 2024

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Thanks to the boom in artificial intelligence, the world of chips is on the cusp of a huge tidal shift.  Governments, tech giants, and startups alike are racing to carve out their slices of the growing semiconductor pie. Here are four trends to look for in the year ahead that will define what the chips of the future will look like, who will make them, and which new technologies they’ll unlock.

1. CHIPS Acts around the world.  On the outskirts of Phoenix, two of the world’s largest chip manufacturers, TSMC and Intel, are racing to construct campuses in the desert that they hope will become the seats of American chipmaking prowess. One thing the efforts have in common is their funding: in March, President Joe Biden announced $8.5 billion in direct federal funds and $11 billion in loans for Intel’s expansions around the country. Weeks later, another $6.6 billion was announced for TSMC.   The awards are just a portion of the US subsidies pouring into the chips industry via the $280 billion CHIPS and Science Act signed in 2022.  But the US is not the only country trying to onshore some of the chipmaking supply chain. Europe, India and Japan are also in the race – a race initiated by China in 2014 when it annunced heavy subsidies for local chip manufacturing.
2. More AI on the edge.  There’s been a lot of interest and investment in edge computing for AI, where the process of pinging the AI model happens directly on your device, like a laptop or smartphone. With the industry increasingly working toward a future in which AI models know a lot about us there’s a demand for faster “edge” chips that can run models without sharing private data.  If edge chips get small and cheap enough, we’re likely to see even more AI-driven “smart devices” in our homes and workplaces. Today, AI models are mostly constrained to data centers.
3. Big Tech enters the chipmaking fray.  In industries ranging from fast fashion to lawn care, companies are paying exorbitant amounts in computing costs to create and train AI models for their businesses.  That means demand for cloud computing to train those models is through the roof.  The companies providing the bulk of that computing power are Amazon, Microsoft, and Google. For years these tech giants have dreamed of increasing their profit margins by making chips for their data centers in-house rather than buying from companies like Nvidia, a giant with a near monopoly on the most advanced AI training chips and a value larger than the GDP of 183 countries. 
4. Nvidia battles the startups.  Despite Nvidia’s dominance, there is a wave of investment flowing toward startups that aim to outcompete it in certain slices of the chip market of the future. Those startups all promise faster AI training, but they have different ideas about which flashy computing technology will get them there, from quantum to photonics to reversible computation. 

2 key takeaways from the article

1. Thanks to the boom in artificial intelligence, the world of chips is on the cusp of a huge tidal shift. Governments, tech giants, and startups alike are racing to carve out their slices of the growing semiconductor pie. 
2. Four trends to look for in the year ahead that will define what the chips of the future will look like, who will make them, and which new technologies they’ll unlock.  One, A race initiated by China in 2014 is joined by USA, Japan, Europe and India to onshore some of the chip-making.  Two, a lot of interest and investment in edge computing for AI, where the process of pinging the AI model happens directly on your device, like a laptop or smartphone instead of company data centers through clouds.  Three, big tech companies are paying exorbitant amounts in computing costs to create and train AI models for their businesses. And four, despite Nvidia’s dominance, there is a wave of investment flowing toward startups that aim to outcompete it in certain slices of the chip market of the future.

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Topics:  Technology, Chip-making, AI