It’s been years for the microchip industry, recovering from long-term supply pressures only to be thrust into the middle of a US-China battle for control of valuable technology supply lines.
But an industry long associated with volatility is quietly getting excited because artificial intelligence (AI) could be the key to long-term stability.
The US company Nvidia dominates the market in specialized chips known as GPUs, which are ideal for training AI programs like the wildly popular ChatGPT chatbot.
“Technology trends are working in Nvidia’s direction,” company vice president Ronnie Vasishta told AFP this week at the Mobile World Congress (MWC) in Barcelona.
This has helped Nvidia become the largest company in the sector – and one of the largest in the United States – with a value of $580 billion.
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Traditional rivals like Intel and Qualcomm are now on maneuvers, desperate to make sure they don’t miss out.
The tiny components, also known as semiconductors, are essential in everything from smartphones, PCs and electric cars to advanced weapons, robotics and all other high-tech machines.
AI has many features in all these fields, and the arrival of chatbots only pushes it further into the public imagination.
Even in sectors where less important engineers speak, the passion is palpable.
AI ‘the most fun’
“The most exciting thing right now is AI,” Cristiano Amon, head of rival company Qualcomm, told the Wall Street Journal event at MWC.
They want phones around the world to be equipped with chips that can handle the toughest AI-related tasks, especially since Qualcomm leads the field in phone chips.
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Vasishta was equally enthusiastic.
“Where and how is AI being used? It will probably be easier to answer where it is not being used,” he said.
Another chip company, UK-based Arm, is further along the production chain than Nvidia – it supplies designs used by chip suppliers.
The company’s Chris Bergey told AFP there is huge potential with AI.
The kind of chips Nvidia produces are good for training AI models in data centers, he said, but smartphones need chips that can act on those models.
“It’s a huge opportunity and it’s everywhere,” he said.
He compared the AI revolution to app startups, which emerged about 15 years ago and are rapidly changing the way we use technology.
“Definitely AI is an interesting range of applications and we’re still scratching the surface of where it’s going to go.”
-‘Very cool’-
However, with Chips, nothing is straightforward.
The supply chain is extremely complex – consulting firm Accenture reckons that chips cross borders 70 times before ending up in phones, cameras or cars.
Countries like China and the United States prefer to have greater control.
And there’s an added problem: the factories that make most of the chips in the world are in Taiwan, a self-governed island claimed by China.
This could bring China and the United States into direct conflict.
As usual, semiconductor executives will not be drawn into discussions of these issues.
“We have no position on geopolitics, we comply with all the required US regulations as a US company,” said Vasishta.
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Bergey, who has spent 25 years in the industry, said he has seen chips lurch from “very cool” to “very boring”.
“He’s cool now, maybe cool with too much attention,” he said.
“It’s a dynamic thing that the industry is doing and we’ll have to see how it plays out.”