Date
22 July 2017
The proliferation of AI and IoT will further boost demand for all kinds of chips, benefiting major players like graphic processing unit leader NVIDIA. Photo: NVIDIA
The proliferation of AI and IoT will further boost demand for all kinds of chips, benefiting major players like graphic processing unit leader NVIDIA. Photo: NVIDIA

AI and IoT to boost chips demand

While stories like JD’s record sales in its June 18 shopping festival always grab the headlines, apart from the online shopping boom, rosy prospects in hardware such as Artificial Intelligence (AI) and Internet of Things (IoT) should not be understated.

It’s believed that emerging AI would boost demand for GPU or graphics processing unit.

Traditional CPU (central processing unit) is highly efficient in calculating but it can’t deal with multi tasks. By contrast, GPU can efficiently tackle several tasks simultaneously.

AI is an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. For example, the ancient China board game Go is very complex and has far more alternatives to consider per move. Tasks like importing all playbooks into a computer and let it calculate which move has the highest odds of win is more suitable for GPU.

NVIDIA Corp., the inventor of GPU, has seen its share price jump nearly fourfold over past year.

If so, will GPU replace CPU? It’s unlikely. GPU has its strength but a system needs CPU for other functions as well.

The advance of AI will hence lead to a bigger market for CPU as well. The same goes for the development IoTs.

In sum, demand for both CPU and GPU will spike due to the soaring number of smart machines.

How about TPU? Tensor processing unit is an application-specific integrated circuit (ASIC) developed by tech titans like Google, specifically for tasks like machine learning.

TPU’s capabilities are more impressive than GPU but with narrower applications. If TPU is a coffee machine , then GPU is one that can make all kinds of drinks.

In my opinion, AI and IoT will boost chips demand by 10 times or even more.

Still, generally speaking, software firms is a better bet in the long run. Hardware usually has shorter product cycles, and manufacturers need to keep making new investments to maintain their competitive advantage.

This article appeared in the Hong Kong Economic Journal on June 21

Translation by Julie Zhu

[Chinese version 中文版]

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RT/RA

Columnist at the Hong Kong Economic Journal

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