by Lorenzo Maria Pacini, Strategic Culture:
The microchip war continues and may soon take a new direction. Many of the geopolitically significant events of 20225 and beyond will depend on it.
TSMC chips on the rise as planned by the U.S.
Taiwan Semiconductor Manufacturing Co (TSMC) quarterly sales exceeded estimates, reinforcing investors’ hopes that the sustained pace of spending on artificial intelligence (AI) hardware will continue through 2025. There is talk of a 39 percent increase in revenues between October and December.
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The growth race in the microchip market is mainly related to the development and massive use of artificial intelligence in virtually everything. The world’s largest contract manufacturer of advanced chips has been one of the biggest beneficiaries of a global race to develop artificial intelligence, so much so that it has set itself a record of 30 percent annual growth.
Impossible? TSMC’s market value nearly doubled in 2024 and is now trading in the United States at a valuation close to $1.1 trillion. The trouble is when the AI fad will end. Problems such as overproduction and difficulty in sourcing materials (rare earths first and foremost) confront the fact that the production and sustenance of AIs are terribly energy-intensive processes. They consume so much, they are not “green” at all. But this is not well told in the mainstream press. What’s more, another problem is arising: AI Killer apps and software, a new type of programs capable of “killing” AIs, ruining them at various levels-devices, networks, servers-succeeding in significantly damaging the use of these new digital technologies.
The U.S. has also set up a series of restrictions to limit the flow of Nvidia’s most powerful chips to China, with uncertain long-term consequences for TSMC’s main customer. Morgan Stanley predicts that the company will project annual sales growth of just under 20 percent in dollar terms, because it is struggling to keep up the sales trend right now anyway, especially with Apple struggling to sell its flagship products and Nvidia being put in check.
Huang delivers the coup de grace
Nice things Qbit computers, too bad we are not yet able to make their enormous potential active.
It just so happened that Jansen Huang, CEO of Nvidia, a leading company in the market, slammed the shares of the quantum sector on Wall Street, declaring that the practical use of this technology will presumably be possible only in two decades. This was a cold shower for an industry that appeared to be poised to take off in a surge but is apparently subject to the laws of the market and the laws of research far more than we think.
Shares of Rigetti Computing and Quantum Computing each fell more than 17 percent in pre-bell trading, while IonQ and D-Wave Quantum dropped 9.4 percent and 14 percent, respectively. A $3 billion loss in market value.
Shares of all the companies rose at least threefold last year, driven by a high-profile turnaround at Alphabet-owned Google and growing computing needs from generative artificial intelligence applications.
In December, Google had unveiled a next-generation chip that the company said would solve in five minutes a computing problem that would have taken a classical computer longer than the entire history of the universe, triggering a rise in its stock price.
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