Nvidia-led CTC 2024 demonstrates fierce competition for AI chips

“It is just like we are in Taylor Swift’s concert,” said a U.S. reporter sitting next while waiting for Nvidia CEO Jensen Huang to make a keynote speech at the company’s GTC 2024 held last Monday at the SAP Center in San Jose, California. The venue, home to the region’s National Hockey League team, was crowded with more than 11,000 visitors. It was divided into sections so that each could accommodate a group of several hundred participants - including press members, financial analysts, industrial analysts, and engineers from partners who contributed to the event.

Tech firms organize developer competitions to give developers and partners an overall picture of their latest technologies to keep them in sync. Since late Apple CEO Steve Jobs released the iPhone in 2007, such events have allowed tech businesses to showcase their new popular products. Even so, Nvidia’s session this year came across as being somewhat unique.

Surprisingly, all the hype was about new semiconductors on which consumers could not even put their hands because they are hidden somewhere in data center servers. It became obvious that semiconductors are gaining their foothold as the superstar of the AI field when CEO Huang demonstrated the next-gen AI chip Blackwell with 11,000 visitors giving him a big round of applause. No wonder that it was dubbed Nvidia's “Woodstock of AI,” likened to a legendary music festival, by Wall Street investors.

Indeed, CEO Huang’s press conference made it clear that the “superstar chips” are in their golden era. High Bandwidth Memory (HBM) solutions developed by Samsung Electronics and SK hynix stood at the center of attention. Answering reporters’ questions, he came down from the stage saying that he could not see them because the stage lights were way too bright. He, a Taiwanese American businessman, shared greetings with Taiwanese reporters and kept talking about the company’s close relationship with Taiwan’s foundry business TSMC. The Dong-A Ilbo had to ask about Samsung nimbly because the room was competitive, and many were waiting to talk to him. Kindly replying to multiple follow-up questions asked by South Korean reporters, the CEO kept emphasizing that HBM would replace data center memory chips across the world, bringing about an enormous growth cycle. Once again, it turned out that the AI chip market has a significant influence as Samsung Electronics’ stock prices jumped more than five percent when the country’s stock market opened around five hours after he made such remarks.

Every time market paradigms shift rapidly; there are always reckless newcomers rising to turn the tide. No one had predicted that Nvidia would become the leader in the AI chip ecosystem to see its market cap skyrocket 20 times compared to five years earlier, thus exceeding South Korea’s GDP. SK hynix, commonly considered 2nd place in memory chips, has risen as the No. 1 HBM leader. Even U.S. business Micron, which filed an antidumping complaint against Japanese and South Korean competitors in the 1980s but only lagged in 3rd place after then, has already started mass-producing HBM solutions to work with Nvidia more nimbly and earlier than Samsung.

The rise and growth of “superstar chips” has been entirely driven by the private sector. In addition, the U.S. government is moving to subsidize relevant domestic companies. A while ago, it announced an 8.5-billion-dollar investment plan on Intel while Micron waited for its turn. U.S. media outlets, including The New York Times and U.S. semiconductor businesses alike, asked the government to implement additional bills such as another Chip Act, saying that such an astronomical scale of subsidy is only a one-time program that will never be enough for the industry. Such overheated competition is palpable in the semiconductor market among countries across the globe.


Hyoun-Soo Kim kimhs@donga.com