CES 2023: AMD, Nvidia, auto applications get the hype, but analysts say this one chip maker ruled

As CES 2023 attracts to a detailed, a lot of the eye within the chip world was lauded on corporations like Superior Micro Gadgets Inc. and Nvidia Corp. however a decrease profile chip maker seems higher positioned popping out of the conference.

Morgan Stanley analyst Joseph Moore mentioned there’s nonetheless a number of warning about general chip demand particularly with softness in China, however autos look like one of many sturdy themes of CES 2023, he mentioned.

“The areas which were weak stay considerably weaker – notably reminiscence, semi cap, and usually PC and cloud builds – whereas the markets which were sturdy (comparable to automotive and industrial) stay sturdy however with lead occasions clearly beginning to normalize, which probably factors to long run income pressures notably in a weaker economic system,” Moore mentioned.

“Nonetheless, the long run themes stay optimistic, particularly for autos (which is more and more the main target of CES),round themes comparable to EVs, ADAS and autonomous.”

Such was the case when Nvidia Corp.

 said on Tuesday it was partnering with Hon Hai Know-how Group

 , or Foxconn, finest identified for being the producer of Apple Inc.’s

iPhone, to make electrical autos that use Nvidia’s Drive Orin chips and sensors, and bringing its GeForce Now streaming online game service to autos made by Hyundai Motor Group
and Swedish EV maker Polestar.

“We usually suppose that Nvidia numbers are probably OK from right here, although there was some warning on promote via in China for gaming, and a transparent consciousness that whereas the corporate’s place inside cloud is superb, that strain in cloud budgets results in considerably decrease visibility,” Moore mentioned. “However we’d say that usually we expect that they’re previous the worst of the pressures of their enterprise, in distinction to a lot of the semiconductor group the place there are nonetheless probably numbers cuts forward.”

In the meantime, Superior Micro Gadgets Inc.

used the CES keynote to introduce the Instinct MI300 chip as “world’s first data-center integrated CPU + GPU.” The  mixed central processing unit and graphics processing unit meant for AI inference, the months-long course of the place information facilities spend thousands and thousands of {dollars} a 12 months on electrical energy to coach and develop synthetic intelligence. AMD Chief Govt and Chair Lisa Su mentioned the MI300 can cut back the time it takes for an inference modeling course of from months to weeks.

However one chip maker that doesn’t get a number of consideration appeared to emerge from CES finest positioned for the 12 months: ON Semiconductor Corp.
which focuses on electrical autos and superior driver help programs as major development drivers, leveraging its legacy place in auto chips.

“Most notably, the corporate’s push into [Silicon Carbide] stays on monitor, and count on to nonetheless exit the 12 months at a run-rate the place nearly all of crystal driving the enterprise is internally sourced,” Moore mentioned. “The corporate stays assured that demand within the EV house will far outpace provide for a very long time and have thus shifted their focus over to execution on the manufacturing aspect.”

Citi Analysis analyst Christopher Danley lauded ON as being probably the most bullish chip maker of CES 2023.

“ON stays on monitor to triple Silicon Carbide income YoY from roughly $300 million in 2022 to $1.0 billion in 2023,” Danley mentioned. “The corporate acknowledged it’s offered out via 2023.”

However ON apart, Danley mentioned everybody at CES is “nervous” about “cracks” in data-center demand, “and they need to be.”

“There was a tone of nervousness on the info middle outlook with many execs and buyers cautious and speaking about ‘uncertainty’ in information middle outlooks from each hyperscalers and enterprise prospects,” Danley mentioned. “We proceed to consider information middle correction will occur given a mess of datapoints and main indicators.”

Again in early December, Danley mentioned his checks “point out order charges from the info middle finish market are fading with draw back from the enterprise finish market (roughly 40% of the info middle finish market) and Fb,” which is owned by guardian firm Meta Platforms Inc.

“We proceed to count on a correction within the information middle finish market in 1H23,” Danley mentioned.

That mentioned, Danley mentioned his prime choose was and proceed to consider a correction there may be inevitable. We stay cautious on semis till all finish markets and corporations appropriate and our prime choose stays chip maker Analog Gadgets Inc.

Again to autos: Ambarella Inc.

on Thursday, Ambarella mentioned it was partnering with Continental AG

to develop {hardware} and software program for assisted driving utilizing AI with the last word objective of an autonomous driving system. The businesses hope to have programs in manufacturing in 2026.

Moore mentioned Ambarella’s tech “continues to impress,” and mentioned the Continental partnership will present software program income that’s shared however with the bigger portion going to Continental.

At CES 2023, “the businesses are exhibiting a full L2+ ADAS implementation for a 10-camera system working on a single chip, which per AMBA was solely utilizing 8% of the compute worth of the chip.”

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