Nvidia Earnings, Supercomputers, Trade Tariffs, Datacenter Gains, A world in conflict

The AI arms race is exploding. 🚀

BigTech is fueling Nvidia that is fueling BigTech. Long live Generative AI and compute. May, 2024.

Hello Everyone,

This is an issue for the weeks of ending on May 16th & May 23rd, 2024. There may be times during the summer or a slow week in news, where I miss a week.

This is one of my “new” Newsletters, and over 10+ now covering various aspects of emerging tech. Thanks for the support, I hope to learn along with you about these topics.

Support me doing this for as low as $1 a week.

• Welcome to the 11th edition of Semiconductor Things™, where I seek to break down some of the news in the Semiconductor, AI chips and datacenter space globally to make it more accessible and easy to follow.

• With the rise of Generative AI, Nvidia and TSMC and the geopolitical importance of Taiwan, this is now a major topic of me in my watching of the emerging tech space that I do as an analyst, writer, curators and news watcher.

• The Technology category is an underdog relative to Substack’s baseline audience, this means I’m an outlier here. To survive, I’m building 10+ Newsletters in “emerging tech” coverage. A pilot never seen before on Substack for a one-person team. Full disclosure, I may not make it.

• Importe note: I am not native to the Semi space, and it might take a while to get up to speed. So we’ll be effectively learning about these things together.

Analyzing and Curating News 🔔

I’m a news fanatic always analyzing the latest in exponential and emerging tech like robotics, semiconductors & AI chips, quantum, synthetic biology and other fields - as well as BigTech in AI.

When to Expect this Newsletter ⏰

This Newsletter will typically go out on Thursday at 7am Eastern Time. Posts are partially paywalled and paid subscriptions are cheap.

What? It will attempt to summarize some of the most important news in the semiconductor industry of the last week.

🔥 An Exciting Announcement - Semi Reports🐭

To afford to dive more deeply into the semiconductor industry, I have also now launched a new Semiconductor Newsletter that will do more in-depth deep dives (at a higher price point) on particular topics, unlike this Newsletter which is more of a periodic rundown of real-world events in the AI chip, semiconductor space and datacenter future of the world.

It’s still the beginning and concept stages though, so expect deep dives to appear very gradually.

Introducing Semiconductor Reports

Learn More.

• For rundowns: Semiconductor Things

• For deep dives: Semiconductor Reports

---

So let’s see what’s new?

So the victory laps of BigTech are now tied to demand for AI chips and Datacenters.

Nvidia's Earnings Q1 2024

No big surprise here:

📱 This is all before Blackwell chips make a material difference on their business.

Nvidia's "Woodstock of AI" Conference GTC 24

Nvidia’s Earnings

• Q1 2024 Revenue $26.04 billion vs. $24.65 billion expected by LSEG

• This revenue is up 18% from Q4 and up 262% from a year ago!

• Nvidia said its data center category rose 427% from the year-ago quarter to $22.6 billion in revenue.

• Nvidia’s market valuation has skyrocketed as well, topping $2.3 trillion. With the 10 to 1 stock-split it could reach $2.5 million.

• AI and Gaming. Nvidia’s data-center division — now by far its largest source of sales — generated $22.6 billion of revenue last quarter. Gaming chips provided $2.6 billion.

  👑 Nvidia’s Guidance shows 2025 is more Majestic than even 2024

  

   

Semiconductor Bits & Bites 📱

• Qualcomm is no longer a top 5 revenue source for Samsung for the first time since 2021, media report, citing a 1st quarter 2024 filing by Samsung. Previously, Qualcomm had outsourced part of the production of top Snapdragon smartphone processors (APs) to Samsung Foundry, but now has shifted all orders to TSMC.

• Quanta Computer, the Taiwan AI server and laptop contract manufacturer, plans record high spending of over NT$25 billion (US$775 million) on new plants and production lines (capex) this year, up from NT$23.3 billion last year and NT$21.3 billion in 2021, media report, with new capacity focused on AI, electronics, and smart cars, medical, manufacturing.

• 🛑 Trade war signs: US tariff increases on China semiconductors, electric vehicles (EVs), etc., will begin Aug. 1, Reuters reports, with import duties on semiconductors doubled to 50% and on China EVs to 100%. The tariff increases include “products targeted by China for dominance, or are products in sectors where the United States has recently made significant investments.”

• ⚔️ Battle lines drawn: Foxconn’s factory investments in India have raised alarms in China, as Henan Province, a major Foxconn iPhone production base, saw smartphone exports in the 1st quarter fall to 6.64 million units, from 16.88 million a year earlier, media report, citing customs data. In value, smartphone exports fell to 27.2 billion yuan (US$3.79 billion) in the 1st quarter, from 71.1 billion yuan ($9.9 billion) a year ago. For full year 2023, Henan smartphone exports fell 14.5% to 57.61 million units.

Nvidia Backed CoreWeave raises $7.5 Billion

Fresh of a new round of funding, CoreWeave have now done a $7.5 billion debt financing following a $1.1 billion funding round the startup announced a few weeks ago where they sit at a $19 Billion valuation.

CoreWeave is an accelerated cloud focused on compute intensive workloads. They provide a suite of value-added services on top of access to GPU compute at scale, helping the CGI & AI/ML markets build a more efficient and cost effective cloud infrastructure.

Cloud Based GPUs

They appear to be trying to scale. The money will pay for servers packed with graphics processing units, networking equipment and cabinet. CoreWeave plans to be in 28 data centers by the end of 2024. CoreWeave’s valuation has jumped to $19 billion from $7 billion months ago. Nvidia is a major CoreWeave investor. So are Coatue, Magnetar, Altimeter Capital, Fidelity and Lykos Global Management, among others.

Semiconductor Bits & Bites 📱

• Nvidia will use panel level fan-out packaging for GB200 systems in 2025, a year earlier than expected, as the bottleneck on CoWoS advanced semiconductor packaging continues, media report, with Taiwan’s Powertech and Innolux preparing to win orders. Around 420,000 GB200 super chips are expected in the 2nd half of this year based on CoWoS capacity, with 2025 output seen at 1.5 million to 2 million units.

• 👾 South Korea Competition: Samsung replaced the chief of its chip division after SK Hynix took the lead in AI memory chips, media report, appointing chip veteran Jun Young Hyun, who joined the division in 2000. Samsung has fallen behind SK Hynix in HBM (high bandwidth memory) chips, which are paired with Nvidia GPUs for AI.

• Samsung Foundry has launched an all-out effort to win Nvidia as a major customer, a project code-named ‘Nemo’ in which every department contributes to the effort to win over the GPU giant, media report, noting Nvidia last used Samsung’s manufacturing services for 8nm GeForce RTX 30 GPUs, before switching to TSMC 5nm.

• 💍 Amazon and Blackwell. Amazon said it has not halted any Nvidia chip orders after a Financial Times story said Amazon (AWS) had “fully transitioned” previous orders for Nvidia’s Grace Hopper chip to its new Blackwell GPUs announced in March, Reuters reports, citing an AWS spokesman, who said the transition to Blackwell chips from Grace Hopper applies only to Project Ceiba, a supercomputer AWS and Nvidia are building together.

Doomsday Prepping: ASML and TSMC Can Disable Chip Machines If China Invades Taiwan

ASML Holding NV and Taiwan Semiconductor Manufacturing Co. have ways to disable the world’s most sophisticated chipmaking machines in the event that China invades Taiwan in an expose by Bloomberg. Is it real? The Netherlands has run simulations on a possible invasion in order to better assess the risks, they added.

Global Chip War

About the size of a city bus, an EUV requires regular servicing and updates. As part of that, the company can remotely force a shut-off which would act as a kill switch, the people said, speaking on condition of anonymity. The Veldhoven-based company is the world’s only manufacturer of these machines, which sell for more than €200 million ($217 million) apiece. Read in Full.