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Marvell wins new AI chip business, but at lower margins

Economic Times

Economic Times · 1y ago

Marvell wins new AI chip business, but at lower margins

Marvell Technology has secured new business partnering with major US-based cloud computing companies to develop custom chips for artificial intelligence (AI). However, Marvell noted that this custom chip unit has lower profit margins compared to its other lines of business. Despite this, Marvell expects the AI chip business to generate $2.5 billion in sales by 2026. Marvell competes with companies like Broadcom and is developing AI chips for multiple customers to be released in the coming years. The profitability of Marvell's custom chip unit is being closely monitored by investors as it competes with industry leader Nvidia.

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Broadcom sees $10 billion in AI chip sales in 2024, but shares dip

Economic Times

Economic Times · 1y ago

Broadcom sees $10 billion in AI chip sales in 2024, but shares dip

Broadcom expects $10 billion in revenue from AI-related chips this year, but its stock dipped as its full-year forecast fell short of investor expectations. Similarly, Marvell Technology's revenue forecast also disappointed, causing its stock to decline. Both companies sell networking chips used in AI computing and assist clients in designing custom AI chips. Broadcom CEO Hock Tan stated that a significant portion of their AI chip revenue would come from two major clients, widely believed to be Google and Meta Platforms. Broadcom's custom chip business is expected to have high margins. Nonetheless, Broadcom did not update its annual revenue forecast, causing some disappointment among investors.

US, Vietnam firms hold business summit during Biden visit; AI deals unveiled

Economic Times

Economic Times · 1y ago

US, Vietnam firms hold business summit during Biden visit; AI deals unveiled

Top executives from leading U.S. and Vietnamese semiconductor, tech, and aviation companies are meeting during President Joe Biden's visit to Hanoi to explore business partnerships. Google, Intel, Amkor, Marvell, GlobalFoundries, and Boeing executives are participating in the Vietnam-U.S. Innovation & Investment Summit. The meeting aims to enhance collaboration, particularly in AI, as the U.S. seeks to reduce the semiconductor industry's exposure to China-related risks. Microsoft and Nvidia have announced AI-related partnerships with Vietnamese companies, and the U.S. has highlighted chip-related investments in Vietnam, including Marvell and Synopsys building chip design centers and Amkor's new factory.

Nvidia plans to sell tech to speed AI chip communication

Economic Times

Economic Times · 2m ago

Nvidia plans to sell tech to speed AI chip communication

Nvidia announced plans to sell NVLink Fusion technology, enhancing AI chip communication. This new tech will aid other chip designers like Marvell, MediaTek, Qualcomm, Fujitsu, and Alchip in building advanced AI systems. Nvidia's CEO, Jensen Huang, introduced this at Computex AI exhibition, alongside plans for Nvidia's Taiwan headquarters. The company is transitioning from gaming graphics to a key player in AI chips, unveiling products like Blackwell Ultra and DGX Spark for AI research.

Samsung Electronics apologises for disappointing profit as it struggles in AI chips

Economic Times

Economic Times · 10m ago

Samsung Electronics apologises for disappointing profit as it struggles in AI chips

- Samsung Electronics warned of lower-than-expected third-quarter profits due to delays in its AI chip business and increased competition from Chinese chip rivals. - Samsung's operating profit for the quarter is estimated at 9.1 trillion won, falling short of market expectations. - The company's late entry into the AI chip market has increased its reliance on traditional, lower-margin chips, making it vulnerable to competition from China. - Samsung's share price fell 1.6% following the earnings guidance, adding to the more than 20% decline it has already experienced this year. - The company's contract chip manufacturing business likely continued to struggle against TSMC, losing money in the third quarter. - Samsung's mobile division saw improved earnings from solid sales of flagship smartphones, while its display unit grew with new product launches from customers like Apple. - Samsung will announce detailed earnings results later this month.

Dell’s quarterly revenue misses estimates on PC weakness

Livemint

Livemint · 8m ago

Dell’s quarterly revenue misses estimates on PC weakness

Dell reported lower than expected Q3 revenue, primarily due to weaker demand for traditional PCs and competition from rival server makers. The company's revenue of $24.37 billion missed estimates of $24.67 billion. While demand for Dell's AI-optimized servers remains strong, its PC segment struggled amid competition and weaker consumer spending. Dell's Chief Operating Officer, Jeff Clarke, highlighted record AI server orders of $3.6 billion in Q3, but investors remain concerned about expenses and competitive pricing impacting the company's margins. Dell is also focusing on new AI PCs to support its traditional computer business.

Nvidia chases $30 billion custom chip market with new unit

Economic Times

Economic Times · 1y ago

Nvidia chases $30 billion custom chip market with new unit

Nvidia is establishing a new business unit dedicated to creating customized chips for cloud computing companies and AI processors. The move aims to tap into the growing market for custom AI chips while protecting Nvidia from competitors seeking alternative solutions. As the dominant player in the high-end AI chip market, Nvidia controls roughly 80% of this sector. However, to meet specific needs regarding cost and energy consumption, major customers like Meta and Microsoft have started developing their own internal chips. Nvidia now plans to assist these companies in designing custom AI chips, potentially competing against industry rivals Broadcom and Marvell. Other target markets for Nvidia's custom chips include telecom, automotive, and video games.

Wipro wins deal to design Intel’s latest chips

Livemint

Livemint · 1y ago

Wipro wins deal to design Intel’s latest chips

Indian IT services company, Wipro, has announced a new deal with Intel Foundry, the chip development division of US chipmaker Intel. Under the deal, Wipro engineers will work on Intel's latest '18A' chip node, which will be used in cutting-edge consumer electronics devices. While the exact size of the deal was not disclosed, it is expected to be one of Wipro's largest deal signings in the past three years. The partnership with Intel Foundry is part of Wipro's plan to become a part of the semiconductor industry and target new markets, particularly in the generative AI space.

Nvidia's subdued forecast dampens enthusiasm in AI chip stocks after steady rally

Economic Times

Economic Times · 11m ago

Nvidia's subdued forecast dampens enthusiasm in AI chip stocks after steady rally

Nvidia shares rebounded slightly in premarket trading as investors remained optimistic about the chip giant's growth prospects despite a forecast that fell short of expectations. The company's shares were down 3.4% after it projected lower-than-expected third-quarter gross margins. However, Nvidia has consistently exceeded estimates in the past, driven by high demand for AI chips. Other chip stocks, including Broadcom, Advanced Micro Devices, and Arm, also experienced a sell-off. While Nvidia's results were not as strong as anticipated, they were still considered positive, giving some relief to investors.

Australia's WiseTech sinks after directors step down over differing views on founder's role

Economic Times

Economic Times · 5m ago

Australia's WiseTech sinks after directors step down over differing views on founder's role

Australian software maker WiseTech Global saw its shares fall 18% after four non-executive directors resigned due to differing views on the role of founder Richard White. White had stepped down as CEO amid personal life allegations but returned as a consultant. An external review largely cleared him, but concerns over his management style and new allegations emerged. WiseTech expects lower revenue but strong EBITDA margins, and plans new director appointments.

Nvidia going for rivals' jugulars as it plans to compete in $30 billion custom chip market — but is it a sign that the AI behemoth has reached its peak?

Techradar

Techradar · 1y ago

Nvidia going for rivals' jugulars as it plans to compete in $30 billion custom chip market — but is it a sign that the AI behemoth has reached its peak?

Nvidia is reportedly planning to enter the lucrative custom chip market to combat the potential threat posed by its customers developing their own internal chips. The company's officials have held discussions with its biggest tech customers about making custom chips for them. The data center custom chip market is estimated to reach $10 billion this year, and double that in 2025, presenting a significant growth opportunity for Nvidia. Currently, Broadcom and Marvell dominate this market, but Nvidia's entry could impact their sales. The news of Nvidia's plans caused its shares to rise while Marvell's shares dropped.

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