Artificial intelligence (AI)-related applications are poised for long-term growth as ChatGPT fever sweeps the world after OpenAI launched the chatbot in November last year, Yuanta Securities Investment Consulting Co (元大投顧) said in a report last week.
In the short term, firms in sectors related to heat dissipation, graphics processing units (GPUs), application-specific integrated circuits (ASICs) and servers are expected to see increased demand, the investment consultancy said in the report issued on Tuesday last week.
The report came as the rise of ChatGPT has prompted more industries worldwide to explore the value of AI innovations, while investors have shown more interest in related companies, despite the technology market facing clear headwinds during the first half of this year.
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Taiwanese companies making hardware that can be used in generative AI include Taiwan Semiconductor Manufacturing Co (TSMC, 台積電); chip designer Global Unichip Corp (創意電子); cloud-based server makers Quanta Computer Inc (廣達電腦), Wiwynn Corp (緯穎科技) and Inventec Corp (英業達); Hon Hai Precision Industry Co (鴻海精密); and server chassis manufacturer Chenbro Micom Co (勤誠興業), local media reports said.
Heat-dissipation parts suppliers Jentech Precision Industrial Co (健策精密), Auras Technology Co (雙鴻科技) and Asia Vital Components Co (奇鋐科技), as well as communications and networking solution providers Accton Technology Corp (智邦科技) and Alpha Networks Inc (明泰科技), are also being targeted by investors for opportunities to capitalize on the AI wave, they said.
Yuanta said that Chenbro’s revenue is likely to benefit from continued shipments of AI server chassis, while Quanta and Inventec could see gross margins rise with a better product mix of higher-priced AI servers.
With increasing user numbers and the amount of queries on generative AI systems such as ChatGPT — coupled with requirements for faster responses and higher accuracy in answers — demand for more servers and better performance is expected to accelerate, Yuanta said.
Market researcher International Data Corp estimated that the global server market grew to US$121.6 billion last year, with AI servers accounting for less than 1 percent of the market.
That indicates ample room for growth in servers that excel in computing power, scalability, transmission speed and lower energy consumption, it said.
Thermal modules are also crucial as they help dissipate heat and ensure steady performance of AI servers, which are powered by more CPUs and GPUs than standard products, Yuanta said.
Major makers in that line of business such as Jentech, Auras and Asia Vital are among Yuanta’s favorites, the report said.
TSMC would likely see more orders from Nvidia Corp, as the US GPU designer adopts TSMC’s 5- nanometer technology in its H100/A100 chips, the report said.
Global Unichip, TSMC’s ASIC design subsidiary, could also benefit from robust demand for AI and high-performance computing applications, as well as from an outsourcing trend for ASIC design in the medium to long term, it said.
With AI technology improving, there is rising demand for chips with better computing power and data processing capability, which should drive growth in the AI ASIC market, the report said.
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