Thematic Research: AI chips (2019)

The entire chip industry is changing direction. Abandoning the single-minded, “double-everything” approach, chip designs are becoming more sophisticated and complex. The industry is entering a new era of microprocessor design which will lead to new chip architectures, new classes of chips, new business models, new alliances, new materials, and radical decisions about who does what in terms of design and manufacture.

Key findings discussed in the report include:

• Players: The $500 billion chip industry is going through a phase of dramatic disruption, as the traditional approach to making processors faster and more powerful can no longer deliver the performance improvements it used to. Rather than simply doubling the power of microprocessors, manufacturers have to find ways to make them smarter, so the emphasis in chip design has shifted from a race to place more transistors onto a square millimeter of silicon to a focus on building microprocessors as systems made up of multiple components, each of which is designed to perform a specialized task

• Technology briefing: For over four decades the processor industry has followed Moore’s law, which predicted that the density of transistors in microchips would double approximately every two years. Since the 1970s a race has been on to develop chips with higher and higher densities of transistors, but Moore’s law couldn’t continue to apply forever. By 2010 it was clear that it would no longer be possible to simply continue doubling the density of transistors on microchips in order to make processors faster, because of two factors

• Trends: The main trends in the AI theme over the next 12 to 24 months include the necessity of accelerators, the coming of heterogeneous architecture, open source hardware, a new class of memory, ubiquitous sensors, China goes for broke and the US turns to trade war, among others

• Industry analysis: The next five years will see the semiconductor industry turned on its head. The demise of Moore’s law will force processor manufacturers to shift away from the drag race of the last 50 years and focus, instead, on the development of more sophisticated, adaptable, processor architectures

• Value chain: This report focuses on semiconductors that help create AI engines

• Companies: This section, covers listed companies and private companies that are making their mark within the AI chip theme

• Sector scorecards: GlobalData, uses a scorecard approach to predict tomorrow’s leading companies within each sector. Our sector scorecards have three screens: a thematic screen, a valuation screen and a risk screen. AI is one the key themes that will define the future of the semiconductor industry