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IDTechEx Discusses Chips as Currency: America, China, and the AI Race

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Running in the background to the more visible, very real wars occurring around the world at present, there is another, economic and industrial in nature. This is a trade war between two principals: the USA and China. The potential consequences of this trade war are incredibly significant to global geopolitics, as how the interaction between the two parties is handled will determine a basis for any future cooperation between the two principals as well as their respective allies. This trade war is over the production of semiconductor chips, those small pieces of (mainly) electronic circuitry that are found in many modern-day devices, from smartphones to televisions, cars to computers. In IDTechEx’s recent report “AI Chips 2023-2033“, the market research company highlights the part that artificial intelligence (AI) plays in this trade war, where the race for AI supremacy has become a national concern.

The Shortage, Where Demand Exceeds Supply

But before discussing the role of AI, it is more instructive to start at the beginning or thereabouts. This does not require going so far back in time – only five years, in fact, to 2018. From January of that year, under the presidency of Donald Trump formerly and now President Joe Biden, the US has enforced several layers of restrictions and barriers to trade on China where semiconductors are concerned, each successive layer aiming to plug a hole that the previous layer(s) had left. These restrictions are shown below.

The tiered restrictions placed on China by the US, where semiconductor design, manufacture, and imports are concerned. Source: IDTechEx

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The reasons for these restrictions are multiple, starting with simple economics (where the US wishes to halt China’s growing market share in the semiconductor supply chain) before moving onto interwoven concerns such as risk exposure and the use of semiconductors for militaristic purposes.

With regards to geographic risk exposure, since 2020, there has been a global chip shortage, where demand for semiconductor chips has exceeded supply. This shortage exposed US design companies to the risk of relying upon South-East Asia manufacturing capabilities, as lead times elongated to upwards of 3 months by the beginning of the crisis.

A number of complementing factors caused the global chip shortage. Principle among them is the COVID-19 Pandemic, which saw a rise in demand (due to more people working from home and so in need of personal computers) and a fall in supply (due to lockdowns across Asia resulting in plants being shut down). Other factors include the rise of data mining (where GPUs are needed, thus once again increasing demand); a drought that hit Taiwan in 2021, resulting in problems with producing ultra-pure water to clean factories and wafers; fires at several fabrication facilities owned by Asahi Kaseri, Renesas and ASML; and difficulties procuring neon (used for lasers in chip manufacture) due to the Russia-Ukraine War, as Ukraine was responsible for providing more than 90% of the US semiconductor-grade neon.

These events combined would likely be enough for a country such as the US to consider investing in their own production capabilities (where the US Chips and Science Act of 2022 is discussed in more detail in the aforementioned IDTechEx report). But the level of spending on semiconductor imports by China, as well as the blurred line between commercial and military ventures in the country, has led the US to become wary of outfitting a rival economy with the tools to surpass them in key technology areas. This is where AI comes into play.

AI as a Motivator

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In addition to the restrictions presented above, on August 26th, 2022, the US government placed a ban on AMD and Nvidia from exporting chips that can be used to support AI workloads to China. According to an August SEC Filing made by Nvidia, this comes in the form of a license agreement, effective immediately, for any future export to China (including Hong Kong) and Russia of Nvidia’s A100 and forthcoming H100 integrated circuits. Any systems that incorporate the A100 and H100 ICs are also covered by the new license requirement, as well as any future integrated circuits that are roughly as advanced as the A100. The filing asserts that the US government has indicated that the new license requirement will address the risk that the covered products may be used in a military capacity by China or Russia. In a similar fashion, a spokesperson for AMD – speaking with Reuters – said that the company had received new license requirements that effectively put a stop on exports of AMD’s MI250 AI chips to China.

This information alludes to the fact that the restrictions imposed upon Chinese companies by the US government are not simply a matter of trying to take some control of the supply chain from the APAC region but also a matter of national security. The measures are an attempt by the US to arrest China’s AI surge by preventing the type of advanced technologies that are needed for China to realize AI supremacy (a not unfounded concern, as by 2018, China had filed 2.5X more patents in AI technologies than the US). Such is the interwoven aspect of commercial and military endeavors in China that the Biden administration has effectively stopped trying to block military-affiliated exports while retaining commercial exports and the revenue that generates. As such, to quote the Center for Strategic & International Studies, “High-end AI chips can no longer be sold to any entity operating in China, whether that is the Chinese military, a Chinese tech company, or even a US company operating a data center in China“.

AI not only promises to be one of the biggest drivers of economic advances within the next quarter century, but for China, AI mastery represents the ability to perfect a model of governance in keeping with existing architectures. The effectiveness of AI models comes largely down to the quality and breadth of the training data set provided. Given that China can collect significant volumes of citizen data, the country is poised to reap the benefits of widespread AI usage.

China’s Response

China has – until recently – been rather quiet in the face of these restrictions, although some displeasure was expressed when TSMC (a Taiwanese semiconductor fabricator that accounts for the vast majority of leading-edge node manufacture globally) announced plans to build new fabrication facilities in Arizona, USA, last year. But in July 2023, China struck back, with restrictions placed on the export of Gallium and Germanium, materials that are used in certain semiconductor chip manufacture.

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Germanium is used in applications such as thermal imaging cameras, solar panels, and telecommunications, where germanium can be used in photodiodes to convert light signals to electrical ones. Gallium is often paired with arsenic to form gallium arsenide, a compound semiconductor that can operate at higher temperatures and frequencies than silicon. At present, China produces around 98% of the world’s gallium and controls around 68% of global refined germanium production in various countries, according to the US Geological Survey. The impact that restrictions on these material exports have on the US and allied countries is not to be downplayed.

Outlook

Both European and Asian delegates alike have warned against these ongoing restrictions by both principals, given that the onus on the shoring up of national interests currently involves punishing the other party concurrently. And the harder that the US pushes against China, the harder that China will lean into plugging money into their own domestic supply chain (and given that in 2021 China spent the equivalent of USD$432 billion on imported microprocessors, money that they may no longer be able to be spend on imports, China is certainly not short of funding).

As with most countries, China has not looked to develop an isolated, front-to-back domestic semiconductor supply chain to date, as they have had the option to work with superior foreign partners rather than domestic firms that do not meet the same standards; design companies could work with established fabs in Taiwan rather than inferior domestic fabs, and Chinese fabs could buy foreign semiconductor manufacturing equipment (SME) with proven quality. Now that they are cut off from these possibilities, China must look to growing domestic capabilities.

In the short term, this will prove to be very difficult for China. While the country has been stockpiling chips and SMEs in anticipation of these imposed controls (the 7 nm chip produced by SMIC was produced using existing deep ultraviolet (DUV) machines), these resources will eventually run out, and so China must look to develop domestic capabilities if their semiconductor industry isn’t to completely dry out, at least in terms of the more advanced node processes. It seems likely that, for the next few years, China will have to rely on more mature node processes in the creation of new chips.

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This being said, it is unlikely that China will have no foreign support at all, at least in terms of SME and components supply. Companies that have a large stake in the Chinese market – such as Zeiss, a German company that supplies mirrors to ASML for their extreme ultraviolet (EUV) lithographic machines, and where China is their fastest growing market – may be unwilling to relinquish revenues generated from China. In an effort to abide by the US export controls, companies may engineer out the US inputs or components in their products such that they can sell these without repercussions in China.

In the longer term, there is cause for cautious optimism for China. Forced to work together in a way that they have not done previously, China’s fabs, design companies, and SME firms may form an ecosystem that is not only stronger from the forced collaboration but also more thoroughly isolated from global supply chain disruptions than most other countries (and, in addition, free from US controls). This comes with significant hurdles, but these may be removed or – at the least – lessened should other countries feel the adverse economic effects of being unable to bolster their raw material supply.

The story is far from being finished, but with a projected growth of US$257.6 billion by 2033 for AI chips alone, there is much to be gained and lost over the next ten years.

Report Coverage

IDTechEx forecasts that the global AI chips market will grow to US$257.6 billion by 2033. The report covers the global AI Chips market across eight industry verticals, with 10-year granular forecasts in seven different categories (such as by geography, by chip architecture, and by application). In addition to the revenue forecasts for AI chips, costs at each stage of the supply chain (design, manufacture, assembly, test & packaging, and operation) are quantified for a leading-edge AI chip. Rigorous calculations and a customizable template for customer use are provided, and analyses of comparative costs between leading and trailing edge node chips.

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IDTechEx’s latest report, “AI Chips 2023-2033”, answers the major questions, challenges and opportunities faced by the AI chip value chain. For further understanding of the markets, players, technologies, opportunities, and challenges, please refer to it.

To find out more about this IDTechEx report, including downloadable sample pages, please visit www.IDTechEx.com/AIChips.

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Wladimir P. is a Content Editor at European Gaming Media and at PICANTE Media and covers a large variety of industries.

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IBS Software Launches Data & AI Center of Excellence, Appoints George Varghese as it’s Head

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October 10, 2024

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SINGAPORE, Oct. 10, 2024 /PRNewswire/ — IBS Software, a leading provider of SaaS solutions to the global travel industry, has launched a Data & AI Center of Excellence (CoE), aimed at driving innovation and responsible AI adoption in the travel and hospitality sectors.

The establishment of the Data & AI CoE reflects IBS Software’s commitment to applying advanced AI and data-driven technologies across its product portfolio to deliver cutting-edge solutions to its global customer base. The initiative will focus on identifying, prioritizing, and enabling top AI use cases in collaboration with product teams and customers. The CoE will define responsible AI practices, focusing on user privacy, data security, and ethical considerations.
George Varghese has been appointed as the new Head of the Data & AI Center of Excellence. Varghese brings over 25 years of expertise in data analytics, machine learning, and financial engineering to the role. He joins IBS Software after a career that spans roles in quantitative finance, algorithm development, and AI/ML deployment. Most recently, George led the AI/ML practice at Upskills Pte Ltd and co-founded Piquant Capital, a systematic hedge fund.
“The travel industry has vast untapped potential for AI-driven innovation,” said George Varghese, Head of the Data & AI CoE at IBS Software. “Creating this new initiative will enable our teams and customers to work together to create meaningful, data-driven solutions that redefine travel and hospitality. Ensuring responsible AI usage while maximizing its benefits will be at the core of what we do.”
Based in Singapore, George will report to Chris Branagan, Chief Technology Officer of IBS Software, and lead the team AI practitioners, with plans for expansion as the CoE evolves.
Chris Branagan comments: “AI holds tremendous potential to reshape the travel experience, but its success relies on trust and responsibility. At IBS Software, we are committed to ensuring that AI not only delivers efficiency and innovation but also adheres to the highest standards of privacy and security. George’s extensive experience and vision for responsible AI align perfectly with our strategy to drive industry-leading solutions.”
To find out more about IBS Software’s use of AI, please visit www.ibsplc.com.
ABOUT IBS SOFTWARE
IBS Software is a leading SaaS solutions provider to the travel industry globally, managing mission-critical operations for customers in the aviation, tour & cruise, hospitality, and energy resources industries. IBS Software’s solutions for the aviation industry cover fleet & crew operations, aircraft maintenance, passenger services, loyalty programs, staff travel and air cargo management. Across the hospitality sector, IBS Software offers a cloud-native, unified platform for hotels and travel sellers, including central reservation (CRS), property management (PMS), revenue management (RMS), call center, booking engine, loyalty and distribution. For the tour & cruise industry, IBS provides a comprehensive, customer-centric, digital platform that covers onshore, online and on-board solutions. Across the energy & resources industry, we provide logistics management solutions that cover logistics planning, operations & accommodation management. The Consulting and Digital Transformation (CDx) business focuses on driving digital transformation initiatives of its customers, leveraging its domain knowledge, digital technologies and engineering excellence. IBS Software operates from 17 offices across the world.
Further information can be found at www.ibsplc.com Follow us: Blog |LinkedIn | Facebook | Instagram
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Artificial Intelligence

HONOR Introduces Circle to Search with Google on the HONOR Magic V3 and HONOR 200 Series

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October 10, 2024

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New feature availability highlights HONOR and Google’s commitment to making mobile AI technology more accessible to everyone
SHENZHEN, China, Oct. 10, 2024 /PRNewswire/ — Global technology brand HONOR today announced the availability of Circle to Search with Google[1] on the flagship HONOR Magic V3, the world’s slimmest inward foldable smartphone, as well as on the HONOR 200 Series, delivering superior performance and an unrivalled studio-level portrait photography experience. The new enhancement ensures everyone can benefit from the latest AI advancements, bringing a seamless and intuitive search experience to smartphone users around the world.

“Enhancements in AI are transforming the way we work, learn, shop, create and interact with our devices. Whether you need translation assistance, homework help or simply want to find out more about an image that’s caught your eye on social media, our smartphones have become our go-to source for searching for this information,” said George Zhao, CEO of HONOR. “As a human-centric technology brand, HONOR is committed to bringing the benefits of AI to all. Thanks to our close industry collaboration with Google and by introducing this feature to not one, but two of our popular smartphone lines, it’s now possible to unlock a world of information at your fingertips, offering a whole new level of convenience in people’s daily lives.”
Circle to Search empowers users to instantly search for anything they see on their phone with Google. With Circle to Search, users can simply circle, highlight, scribble or tap anywhere on their screen to select the text, image or video they want to search for more information about, without switching apps. Circle to Search makes searching for whatever inspires you even easier.
[1] Google and Android are trademarks of Google LLC.
HONOR’s AI Journey: Building a Comprehensive and Responsible AI EcosystemRecognizing the pivotal role of AI in shaping future lifestyles, HONOR has long viewed AI as a strategic priority. Through continuous R&D and open collaboration with industry partners, HONOR is dedicated to enriching its on-device AI ecosystem, delivering forward-thinking AI solutions to consumers worldwide. Earlier this year, HONOR unveiled HONOR’s Four-layer AI Architecture, a blueprint for industry-wide adoption that will ultimately benefit users everywhere. Embracing a hybrid AI strategy that fully integrates on-device AI and cloud AI capabilities, HONOR has developed a multi-layered security architecture and the HONOR Personal Cloud Compute, safeguarding user data and privacy during interactions with cloud AI services. 
Unveiled at IFA 2024, the latest flagship foldable HONOR Magic V3 features a host of pioneering AI capabilities. Teaming up with Google, the HONOR Magic V3 is equipped with AI Eraser, Face to Face Translation and HONOR Notes tools, empowering users with pro-grade productivity features. In keeping with its user-centric approach, HONOR has introduced the industry’s first AI Defocus Eye Protection Technology and AI Deepfake Detection Anti-Fraud Technology, addressing common health and safety concerns associated with smartphone usage. In addition, running on MagicOS 8.0.1, HONOR devices come with the intent-based Magic Portal and Magic Capsule, redefining human-device interactions to offer users optimal convenience.
Price and AvailabilityWhile the HONOR 200 Series has achieved remarkable success since its worldwide debut in June, the HONOR Magic V3 has also been available in international markets since September 5th, with prices starting from EUR 1,999.
About HONOR   HONOR is a leading global provider of smart devices. It is dedicated to becoming a global iconic technology brand and creating a new intelligent world for everyone through its powerful products and services. With an unwavering focus on R&D, it is committed to developing technology that empowers people around the globe to go beyond, giving them the freedom to achieve and do more. Offering a range of high-quality smartphones, tablets, laptops and wearables to suit every budget, HONOR’s portfolio of innovative, premium and reliable products enable people to become a better version of themselves.   
For more information, please visit HONOR online at www.honor.com
https://community.honor.com/    https://www.facebook.com/honorglobal/    https://twitter.com/Honorglobal    https://www.instagram.com/honorglobal/    https://www.youtube.com/c/HonorOfficial    
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Artificial Intelligence

Royal Mail Selects Workday Peakon Employee Voice to Strengthen Employee Engagement and Drive Transformation

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October 10, 2024

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Historic Postal Service Will Prioritise Workforce Wellbeing Through Data-Driven Insights and Personalised Actions
LONDON, Oct. 10, 2024 /PRNewswire/ — Workday Inc. (NASDAQ: WDAY), a leading provider of solutions to help organisations manage their people and money, today announced Royal Mail’s selection of Workday Peakon Employee Voice to drive positive change among its workforce of over 125,000 employees.

Royal Mail, the UK’s designated universal postal service provider, is investing in its people by selecting Workday Peakon Employee Voice as part of ongoing strides to modernise and transform its culture. From its origins in 1615 with the establishment of the ‘Master of the Posts’ under King Henry VIII, Royal Mail has been an integral part of the UK’s fabric, connecting communities and businesses across the nation. Today, as it navigates a period of transformation and growth, the organisation is reaffirming its commitment to fostering a culture of open communication, trust, and collaboration with the help of Workday’s innovative technology.
“At Royal Mail, our people are our greatest asset, and we are committed to creating a workplace where everyone feels valued, heard, and empowered to reach their full potential,” said Rachel Blackett, head of engagement and wellbeing, Royal Mail. “Workday Peakon Employee Voice will play a crucial role in helping us achieve this goal, enabling us to build a stronger, more resilient organisation for the future.”
Workday Peakon Employee Voice will provide Royal Mail with real-time insights into employee sentiment, enabling leaders to make informed, data-driven decisions and take proactive steps to address concerns and build a more engaged workforce. The organisation’s leaders will leverage accurate comparisons, consistent benchmarking and robust analytical models to understand where change is needed. Whether for leadership development, employee wellbeing, diversity, or employee health, Royal Mail will be empowered to drive positive change, as part of its mission to redefine its future.
“The key to any successful organisation is a connected and engaged workforce,” said Daniel Pell, vice president and country manager, UKI, Workday. “With data-driven insights driven by AI capabilities, Workday will provide Royal Mail with the tools and intelligence needed to take action, build trust, and shape the future of the organisation and its continued service to the UK.”
About WorkdayWorkday is a leading enterprise platform that helps organisations manage their most important assets – their people and money. The Workday platform is built with AI at the core to help customers elevate people, supercharge work, and move their business forever forward. Workday is used by more than 10,500 organisations around the world and across industries – from medium-sized businesses to more than 60% of the Fortune 500. For more information about Workday, visit workday.com.
© 2024 Workday, Inc. All rights reserved. Workday and the Workday logo are registered trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.
Forward-Looking StatementsThis press release contains forward-looking statements including, among other things, statements regarding Workday’s plans, beliefs, and expectations. These forward-looking statements are based only on currently available information and our current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control. If the risks materialise, assumptions prove incorrect, or we experience unexpected changes in circumstances, actual results could differ materially from the results implied by these forward-looking statements, and therefore you should not rely on any forward-looking statements. Risks include, but are not limited to, risks described in our filings with the Securities and Exchange Commission (“SEC”), including our most recent report on Form 10-Q or Form 10-K and other reports that we have filed and will file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by law.
Any unreleased services, features, or functions referenced in this document, our website, or other press releases or public statements that are not currently available are subject to change at Workday’s discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.
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