The Future Of Chip-Making

1st December, 2017 by

We are living at a time in which the scope of the future spans across both ends of the spectrum: monumental leaps forward via intangible innovation versus nearly invisible changes to the culture at the hands of large conglomerate mergers.

Merge Ahead

When American semiconductor giant Qualcomm rejected a $130 billion bid to merge with Singapore-based technology company Broadcom, it signaled a pushback against what would have been the biggest acquisition in the history of technology. It’s crazy to think that just five years ago, the $1 billion purchase of Instagram by tech giant Facebook made the headlines for its apparent sky high price tag, but here we are in an unprecedented present with a potential buyout of almost 130 times that.

The merger would have made history—Broadcom would have ended up paying nearly 20 times that paid for King, makers of Candy Crush. However, more than any historical recognition, it would have made Qualcomm the dominant company in the chip-making industry. “Chip-making” might not have the same mainstream cache as the social media industrial complex, but it is quietly leading the tech industry in ways the general public has yet to fully grasp.

UK companies like ARM are helping fuel the demand, gripping the attention of international companies like Japan’s own SoftBank, which purchased ARM in 2016 for £24.3 billion ($28.6 billion). The fusing of tech functionality and the human experience has long been the prized goal of the industry. Speedy advancements in machine learning are all thanks to companies like Qualcomm. The future of augmented reality and intuitive technology is contingent on the development of Artificial Intelligence (AI) and technologies equipped with neural networks that can mimic the human brain. As a result, the influx of interest has turned chip-making into certifiable gold, with greater demand for the kind of tech infrastructure to push competitive companies forward.

UK-based company Graphcore is building an Intelligent Processing Unit (IPU), its own specialized AI processor that has helped the company raise £22.8 million ($28.6 million), marking another significant indication that the chip-making boom is pushing tech companies into radical new territory. ARM says that it expects to help ship 100 billion chips in the next five years alone. Speaking to Wired UK, Nandan Nayampally, ARM’s vice president and general manager for computer products, stated that companies like ARM are focused on designing chips designed to “power the most advanced computers…enabling faster and more efficient distributed intelligence” between the networks and the cloud.

Letting the Chips Fall Where they May

Much of this is dependent on more high-end graphic processing units (GPU). Over the years, GPUs have become something of a constant in the machine-learning industry. They are capable of a more efficient work output, less demand for physical infrastructure, and an ability to work through vast sets of data in record time. The less utilitarian usage of GPUs has been mostly in the gaming industry, which accounts for an $18 billion revenue in the United States alone.

With this boom, companies like Qualcomm are forcing rivals and collaborators alike to plug their imagination from tech and into business by asking others to speculate more efficiently. When explaining Qualcomm’s rejection of the $130 billion Broadcom bid, Paul Jacobs, Qualcomm executive chairman, said in a statement that the proposal significantly undervalues Qualcomm relative to the company’s leadership position in mobile technology and growth prospects.”

In that respect, it seems that the future of chip-making is contingent both on a public’s willingness to buy into augmented reality and artificial intelligence as the future of everyday tech, as well as companies’ ability to see the long game ahead. In 2017, a $130 billion buying bid is simply looking like loose change.