Since late 2023, the semiconductor industry has been eagerly anticipating the upcoming edge AI boom, particularly in AI smartphones and AI PCs – the two largest consumer electronics applications. This trend is expected to drive significant upgrades and replacement cycles for main computing chips and various peripheral chips.
While MediaTek is poised for breakthroughs in both smartphone and PC processors, Taiwanese IC design companies, long holding crucial positions in the PC supply chain, are seen as highly competitive in the coming AI PC era. However, the immediate realization of this trend and its potential to revive the IC design industry faces challenges, as many AI applications still require refinement and more time to mature.
Take the recently launched Copilot+ PCs as an example. Despite Microsoft and Qualcomm's high-profile promotion and support from major American notebook brands, initial reviews have been mixed. While AI-related functions and battery life have received positive feedback, computing performance, especially in gaming and engineering applications, has fallen short of expectations.
Qualcomm's focus on the Snapdragon X series platform emphasizes business and creative applications rather than high-intensity graphics computing for gaming. Most reviewers agree that these Copilot+ PCs are more suitable for business and office use.
Although AI and software applications are impressive, there's still significant room for improvement in versatility and practicality. Additionally, many software applications have yet to release versions compatible with the Windows on ARM (WoA) system, indicating that ecosystem development requires more time.
AI smartphone applications have progressed slightly faster than PCs, with on-device generative AI for images introduced about a year ago. Various image and text generation applications have become more common on smartphones, and voice assistant functions are expected to see major improvements in flagship models during the second half of 2024.
However, maintaining the appeal of AI smartphones remains a significant challenge for System-on-Chip (SoC) manufacturers, smartphone brands, and app developers. Many industry insiders suggest that while generative AI functions on smartphones have made significant progress over the past year, these applications alone are no longer sufficient to maintain consumer interest. The ability to achieve breakthroughs with intelligent voice assistants as a core feature may be crucial.
IC design companies generally acknowledge that AI is still in its early stages of development. Truly revolutionary applications for both smartphones and PCs will take time to develop. Beyond these devices, there's greater anticipation for wider AIoT applications, including smart homes, factories, and offices.
Many customers are already seeking assistance from Taiwanese IC design companies for specific technologies in these areas. As AIoT ecosystems mature, they are expected to drive AI development in smartphones and PCs.
In brief, most industry players estimate that AI's ability to invigorate the market will be limited in the second half of 2024. However, robust growth can be anticipated in 2025 should market conditions stabilize in 2024.
