We think there will be a few more legs of semis consolidation. So we compiled a list of 5 semis companies who we think will survive:
1. ADI & TI
2. QCOM
3. NVDA
4. Some chip company from China
5. The smoldering remains of Intel, probably owned by others.
It seems very likely that most AI Training will be run on Nvidia GPUs. The software environments for training are too numerous and changing rapidly, which favors the soft, warm familiarity of CUDA over speculative gains offered by new entrants.
This downturn in semis is different from past cycles in that each segment seems to be taking a beating at different times. This cycle is serial, not parallel, and we probably need to see all of that play out before the sector starts to recover.
Lots of people think chip companies should build “services” businesses to capture more value. The list of companies that have accomplished this is very close to zero.
Qualcomm’s Auto event – painted a compelling strategic picture for their future in the segment, and then provided answers to a lot of the practical questions too. They look very well positioned for autos of today.
While Arm may be able to beat Qualcomm in court, their lawsuit risks creating a really challenging marketing message, especially at a time when the threat of RISC V looms ever larger. Maybe they win the legal battle, but lose the marketing war.
A recap of our emerging thesis on the changing nature of compute and what that means for semis companies large and small.
AMD is a good proxy for the rest of the semis industry – beset by cyclical challenges but also increasingly well-positioned for the changing shape of the industry.
There seems to be some momentum for Arm to sell itself to some sort of consortium of major licensees. In theory, this could be a good outcome, but in practice would be very complex.
Nvidia’s Analyst Day demonstrated the company is now the leading force in the data center. They have risen to this crest on the back of some incredible execution, and their rise shows the very powerful wave washing through the market for compute semis。