Grog(gy) Funding

Semiconductor Weekly - Business | Investing | Technology

August 10, 2024

Groq dominates semiconductor headlines this week with massive funding. Also, global semiconductor activities are heating up!

Today’s newsletter

  • 💸Groq Raises a Whopping $640M to Challenge Nvidia

  •  🦾AMD is already an AI chip company

(image credit: Groq)

$640M Series D Round! Groq secured massive Series D round at a $2.8B valuation.

  • The round is led by BlackRock Private Equity Partners, with participation from Neuberger Berman, Cisco Investments, KDDI and Samsung Catalyst.

  • Previous investors in Groq include Chamath Palihapitiya's Social Capital, TDK Ventures and D1 Capital Partners.

Founded in 2016 Groq was founded by Jonathan Ross, a former Google engineer, with a mission to democratize access to cutting-edge AI inference.

  • Unlike the computationally intensive process of training AI models, inference focuses on utilizing those trained models to perform tasks efficiently and quickly.

  • The company has rapidly grown its developer base, with over 360,000 developers now building on GroqCloud™.

Is Inference new battleground? Groq’s AI inference platform is known for its unprecedented speed and efficiency, offering developers instant generative AI inference performance.

  • “Jonathan realized that the bottleneck to making AI ubiquitous would be running AI models quickly and with low energy consumption, thus, with a low carbon footprint.”

  • The LPU™ technology, built with a software-first design, allows rapid deployment of AI models, outpacing competitors.

Going forward Groq plans to deploy over 108,000 LPUs by Q1 2025, marking the largest AI inference compute deployment outside of hyperscalers.

  • Groq has partnered with Samsung Foundry, utilizing its advanced 4nm process at the Taylor, Texas facility to produce next-gen LPUs.

  • The company also aims to expand globally, partnering with enterprises like Aramco Digital to build AI compute centers and accelerate AI innovation

AMD sold more than $1 billion worth of its MI300X AI chips during the 2Q 2024

(image credit: AMD)

AMD reported Q2 2024 revenue of $5.4 billion.

  • Nearly 50% of AMD’s Q2 2024 revenue came from data center products, a significant shift from its traditional markets like PCs and gaming consoles.

  • The data center business doubled year-over-year, fueled by the success of the AMD Instinct MI300 accelerator, which achieved over $1 billion in sales this quarter alone.

AI is the core of AMD AMD’s MI300, a direct competitor to Nvidia’s H100, is driving this growth, with AMD planning to release new AI chips annually.

  • Upcoming releases include the MI325X later this year, the MI350 in 2025, and the MI400 in 2026, with the MI350 expected to be highly competitive with Nvidia’s offerings.

AMD anticipates tight supply for the MI300 through 2025 due to high demand.

  • While AMD’s data center business is growing rapidly, it remains much smaller than Nvidia’s, with $2.8 billion in quarterly revenue compared to Nvidia’s $22.6 billion.

  • The success in AI could accelerate innovation in other areas, potentially benefiting gamers and PC users in the long term.

🚀 Funding & Deal

  • Silicon Box, a Singapore-based semiconductor design and integration services startup, secured $99.86 million in Series B2 funding led by Prysm Capital. This follows a $200 million Series B round in January, pushing the company's valuation to over $1 billion. (Link)

  • Riverlane raised $75 million in Series C funding to advance its quantum error correction stack, which integrates chips, hardware, and software for quantum computing. (Link)

  • LightSolver received €12.5 million in grant and equity funding from the European Innovation Council for its laser-based processing unit, aimed at compute-intensive workloads like CAE and bio-science computations. (Link)

  • Black Sesame listed on the Hong Kong Stock Exchange with lackluster 1st day performance. (Link)

  • Sivers Semiconductors plans to spin off and merge its photonics subsidiary, focusing on InP laser sources, with SPAC byNordic Acquisition Corp., creating a standalone publicly traded company while retaining its wireless business. (Link)

  • Polymatech Electronics acquired Nisene Technology Group, strengthening its semiconductor portfolio with multi-wafer technology and planning a $500 million investment to produce advanced chips and wafers in California. (Link)

💹 Earning Spotlight

  • Tokyo Electron raised its full-year profit forecast to 506 billion yen (approximately $3.5 billion), up from a previous estimate of 462 billion yen, driven by strong demand for AI-related semiconductors and equipment. The company expects net sales to reach 1.72 trillion yen, reflecting the robust growth in AI applications. (Link)

  • SMIC reported a 22% year-over-year increase in Q2 revenue, reaching $1.56 billion, and provided strong guidance for the next quarter. The company's shares surged as investors responded positively to its ability to navigate geopolitical challenges while maintaining solid chip demand. (Link)

🧿 Industry on the Move

  • Global semiconductor sales grew by 18.3% in Q2 2024 compared to the same period last year, and 6.5% quarter-over-quarter, driven by strong demand across various sectors. (Link)

  • The majority of semiconductor chip sales now come from the automotive, industrial, and computing sectors, reflecting a shift in market demand. (Link)

  • The semiconductor intellectual property (IP) market is expanding rapidly, with increasing demand for AI, IoT, and 5G driving growth. (Link)

  • Advanced applications are boosting demand for semiconductor ALD and CVD precursors, critical materials for chip manufacturing. (Link)

  • The data might suggest that Korean semiconductor makers are still navigate U.S. policy gaps to sustain its semiconductor operations in China, underscoring the challenges posed by geopolitical restrictions. (Link)

🧭 Chip Launchpad

  • NASA has developed its first quantum memory, a significant step forward in quantum computing technology. (Link)

  • Entegris secured a key supply agreement with a major chipmaker, reinforcing its role in the semiconductor supply chain. (Link)

  • UCIe Consortium has released the 2.0 specification, advancing chip design with improved manageability, system architecture, and 3D packaging. (Link)

  • EUV Lithography technology has introduced a new standard in semiconductor manufacturing, surpassing previous benchmarks. (Link)

  • Neo Semiconductor announced its 3D-X AI chip, aimed at replacing current HBM chips and resolving data bus bottlenecks for better AI performance. (Link)

  • 2nm SoCs face significant testing challenges with Automated Test Equipment (ATE), highlighting the industry's focus on overcoming these complexities. (Link)

  • Multi-die packaging is becoming increasingly critical for advanced semiconductor designs, with a strong emphasis on ensuring quality and reliability. (Link)

  • HBM3E Technology is making strides with enhanced bandwidth, crucial for data-intensive applications. (Link)

🎙️Echo Chambers

  • "India has missed opportunities in chip manufacturing, but we now have a unique chance to catch up and build a strong semiconductor ecosystem." - iVP Semiconductor Founder P Raja Manickam (Link)

  • "Asia is crucial in three ways: it's a key market, a complementary manufacturing footprint to Europe, and a hub for R&D in the region." - Infineon CEO Jochen Hanebeck (Link)

✈️ Across the Globe

🌎 America

  • The U.S. CHIPS Act marks its second anniversary with mixed results; while it has spurred significant investment in domestic semiconductor manufacturing, challenges remain in achieving its long-term goals. (Link)

  • Edwards Vacuum's project in upstate New York aligns with the region's growing semiconductor industry, contributing to the state's broader plans to become a semiconductor hub. (Link)

  • SK Hynix and the U.S. Department of Commerce have reached preliminary terms for advancing semiconductor manufacturing in the U.S., marking a significant step in global supply chain collaboration. (Link)

🌏 Asia

  • Japan is positioning itself to become a semiconductor powerhouse, leveraging its technological expertise and government support to enhance its role in the global chip industry. (Link)

  • Malaysia is advancing up the semiconductor value chain by establishing its first semiconductor park, with Infineon playing a key role in driving the country's ambitions to enhance its global industry presence. (Link)

  • Malaysia is also setting up a chip design hub to drive demand and boost its semiconductor industry's capabilities, focusing on high-value segments. (Link)

  • India is competing with China for leadership in the global semiconductor industry, with both nations investing heavily in building robust ecosystems around semiconductor manufacturing. (Link)

  • Micron emphasizes that semiconductor manufacturing in India can create vast ecosystems, driving innovation, job creation, and economic growth. (Link)

🌏 Europe & EMEA

  • UK has canceled two major AI projects totaling £1.3 billion, including a £500 million AI Research Resource and an £800 million exascale supercomputer. The government is shifting its focus toward AI regulations and advancing a new AI Opportunities Action Plan. (Link)

  • Fraunhofer Institute in Germany has announced new advancements in smart manufacturing, focusing on the development of intelligent systems to enhance production efficiency and sustainability. (Link)

  • Queen's University Belfast released a landmark report during the RISE Annual Summer School, highlighting the importance of security in the globalized era of technology, with a focus on Europe’s role in shaping future cybersecurity standards. (Link)

🗼 In-Depth & Insights

“By 2027, over 50 percent of battery electric vehicles (BEVs) could rely on silicon carbide (SiC) powertrains, compared with about 30 percent today. That shift, combined with the growing preference for BEVs among EV buyers, will increase SiC demand.”

“From a product perspective, Intel has been blessed by owning the largest cow in the industry. The client business supports CPUs for the important PC segment. The drawback is that the client division has been far too powerful and dominating the other divisions.”

“the memory market is also seeing higher levels of customization due to AI. High-bandwidth memory (HBM) — which is integrated with GPUs into a single module — will become tailored to the specific end-application, resulting in long term contract agreements.”

📈 Chart of the Week

The U.S. Commerce Department has awarded over $30 billion to 15 companies, a move expected to create more than 115,000 jobs—78,000 in construction and 36,000 in production—while incentivizing over $350 billion in private investment. (The White House).