HomeIndustriesChip fortunes are diverging and Tesla is taking a break

Chip fortunes are diverging and Tesla is taking a break

Hello, that is Yifan from Silicon Valley, your #techAsia host this week. It's getting somewhat chilly within the San Francisco Bay Area. The smell of fall jogs my memory that we are actually within the season of Halloween, pumpkin spice lattes, and naturally third quarter tech results.

While the final word barometer of artificial intelligence demand, Nvidia, won't report its earnings until next month, we're already seeing some pretty telling numbers from other chipmakers about where the AI ​​boom is headed.

ASML, the Dutch chip-making equipment provider, surprised the market (and everybody else) last week with a bearish sales outlook that dragged all major chip stocks lower as investors ponder whether the AI-driven chip craze is over. Samsung's operating profit fell nearly 13 percent within the third quarter as the corporate struggled to deliver its latest AI memory chip.

But TSMC soon said the “insane” AI demand was real and would proceed to learn the world's largest contract chipmaker. And SK Hynix, Samsung's predominant competitor in the sphere of high-performance AI storage, has just reported Record quarterly profit.

It's not hard to see that not all chipmakers are benefiting equally from the generative AI boom, just like how Nvidia has reaped many of the advantages from the demand for AI chips. The query is: Will those that are falling behind eventually catch up, or will the gap between the market leader and others just widen?

Blacklisted corporations join forces

Chinese artificial intelligence giant SenseTime Group uses “lots” of local chipsfrom Huawei Technologies, amongst others, to coach its large language models as a part of an effort to quickly develop its own AI computing ecosystem.

SenseTime's vice chairman of Asia-Pacific operations told Nikkei Asia Cissy Zhou, Cheng Ting-Fang, And Lauly Li that the corporate's next-generation artificial intelligence data center in Shanghai is supplied with chips from all major domestic manufacturers, including Huawei and Biren Technology.

All three of those corporations have been placed on trade blacklists by Washington, meaning they would not have access to probably the most advanced AI chips or chip manufacturing tools from the United States.

Meanwhile, Huawei isn't just working to enhance its semiconductor capabilities. The company announced this week that airline Emirates and ride-hailing service Grab have launched apps for his or her HarmonyOS, a big step forward for the Chinese company because it attempts to beat foreign markets after U.S. trade restrictions denied it access to American operating systems.

AI on a budget

Chinese AI groups are finding creative ways to cut back the price of constructing competitive models and leveraging their strengths to mitigate the impact of U.S. chip restrictions.

Tech groups 01.aiDeepSeek, MiniMax and Stepfun are all choosing a technically demanding but cheaper technique to construct AI models with small data sets, writes the Financial Times. Eleanor Olcott. This allows them to supply developers cheaper models for constructing AI apps.

At the identical time, there’s a fierce price cutting war in China to bring inference prices – the value of using large language models to generate a solution – all the way down to a fraction of what their US counterparts offer.

This has made it easier for Chinese startups looking to copy the viral success of ByteDance's video-sharing app TikTok to bring latest AI products to market by tapping into the country's vast pool of talented and low cost engineers .

Not for everybody

Few top chip developers will give you the chance to proceed investing in semiconductors for AI computing given how much money is required to stay competitive, the chief technology officer of US chipmaker Marvell told Nikkei Asia Cheng Ting Fang included Exclusive interview.

However, Marvell CTO Noam Mizrahi said the marketplace for custom artificial intelligence chips will grow strongly, even when “not many” players can afford to remain in the sport.

Marvell is the world's second largest supplier of network chips after Broadcom. Products include connectivity chips for data centers, telecommunications and networking equipment.

While standard products from Nvidia and Advanced Micro Devices remain popular, leading cloud service providers reminiscent of Google, Microsoft, Amazon and Meta are investing heavily in developing their very own chips for data centers, which is giving Marvell a giant tailwind.

But Mizrahi said the AI ​​chip game isn't for everybody. “It’s a playground for individuals who have the dimensions and might invest over an extended time frame.”

A very good day for Tesla

Tesla had a troublesome month. After the highly anticipated Robotaxi, unveiled on October 10, did not impress investors, the corporate's shares saw a pointy and sustained decline. But it had one surprising comeback on Wednesday after Nikkei Asia reported 8 percent year-on-year net profit growth in July-September Yifan Yu reported.

Profitability has been a black eye to Tesla's profits this 12 months because the U.S. electric vehicle maker faces weaker demand for electric vehicles in key markets including China, where heated competition has forced local corporations like BYD to chop prices. Tariffs on Chinese-made electric vehicles, meanwhile, threaten the longer term of its predominant export hub and most cost-effective factory, the Shanghai Gigafactory.

But on Wednesday, Tesla said its Shanghai factory exported its millionth vehicle in September and achieved its lowest production costs per vehicle within the third quarter.

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