According to a report from Wall Street Journal, Alphabet CFO Ruth Porat announced in a statement on May 30 that Google has committed to investing USD 2 billion in Malaysia. The investment includes building its first data center, expanding Google Cloud, and further developing artificial intelligence (AI).

Porat highlighted that this will be Google’s largest investment project in Malaysia. Google estimates that this investment will contribute over USD 3.2 billion to Malaysia’s GDP and create 26,500 jobs by 2030.

As per a report from Bloomberg, Google stated that in addition to developing cloud computing services, it will also support AI literacy programs for students and educators.

In its earnings call in April, Porat mentioned that the significant year-over-year increase in capital expenditures over recent quarters reflects Alphabet’s confidence in the potential of AI. She projected that the quarterly capital expenditures for the second to fourth quarters of this year would be comparable to or slightly higher than those in the first quarter.

On May 2, Microsoft Corp. announced that it will invest USD 2.2 billion in Malaysia over the next four years to support the country’s digital transformation. The investment projects include developing digital infrastructure, creating AI skill opportunities, establishing a National AI Excellence Center, and enhancing Malaysia’s cybersecurity capabilities.

Earlier this week, Malaysian Prime Minister Anwar Ibrahim announced the National Semiconductor Strategy, which includes providing at least USD 5.3 billion in financial support and training 60,000 semiconductor engineers, aiming to make Malaysia a global chip hub.

Amidst the U.S.-China rivalry and other geopolitical tensions, global companies are seeking to diversify their supply chains. Facing competition between the U.S. and China, Malaysia is reportedly keen to maintain a neutral position in the semiconductor supply chain landscape. According to the Malaysian Investment Development Authority (MIDA), the country currently provides 13% of global testing and packaging.

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• [News] Malaysia’s Major Investment Aims to Establish Global Chip Hub
• [News] Overseas Expansion of Testing and Packaging Facilities – Japan, Malaysia, and Singapore Emerge as Top Choices

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On May 20, a report by Reuters revealed that Google plans to invest an additional Euro 1 billion in its data center park in Finland. This move aims to expand the scale and boost its AI business growth in Europe.

The report notes that in recent years, many data centers have been established in Nordic countries due to the cool climate, tax incentives, and ample supply of renewable energy. Finland’s wind power capacity has seen significant growth over these years, up by 75% to 5,677 megawatts by 2022, which brings electricity prices even down to negative values on particularly windy days.

Thus, Data center operators like Google have been taken advantage of this renewable energy, and already signed long-term wind power purchase agreements in Finland.

Driven by the AI wave, cloud providers such as Microsoft, Google, Meta, and Amazon have an increasingly robust demand for AI servers and data centers.

According to a previous forecast by TrendForce, considering the global CSPs’ demands for high-end AI servers (Those equipped with NVIDIA, AMD, or other high-end ASIC chips included) in 2024, the demands from four major U.S. CSPs: Microsoft, Google, AWS, and Meta are expected to account for 20.2%, 16.6%, 16%, and 10.8% of global demand respectively, reigning over the global market with a total proportion of more than 60%.

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• [Insights] Big Four CSPs Continue to Shine in Q1 2024 Financial Reports, AI Returns Garnering Attention

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The recovery in demand for PCs and smartphones will take time, leading to a halt in the upward trend of DRAM prices, remaining stable for two consecutive months. However, the rapid growth in demand for High Bandwidth Memory (HBM), essential for data center servers and generative AI, is expected to boost future DRAM prices as the production trend of HBM rises.

The Nikkei News reported on May 18th that the recovery in demand for PCs and smartphones will take time, leading to a halt in the upward trend of DRAM prices used in smartphones, PCs, and data center servers for temporary data storage.

In April 2024, the wholesale price (bulk transaction price) of the benchmark product DDR4 8Gb was around USD 1.95 per unit, and the price of the smaller capacity 4Gb product was around USD 1.50 per unit, both remaining unchanged from the previous month (March 2024) and marking the second consecutive month of stability.

As of February 2024, DRAM prices had risen for four consecutive months. DRAM wholesale prices are negotiated between memory manufacturers and customers monthly or quarterly. Reportedly, approximately 50% of DRAM demand comes from PCs and servers, while around 35% comes from smartphones.

The report indicated that the demand for HBM, essential for generative AI, is rapidly increasing, and market expectations for the production trend of HBM are expected to boost future DRAM price increases.

A source cited in the report, which is an Electronic product trader, noted that some major manufacturers have accepted the memory manufacturers’ price hike requests. A PC manufacturer source cited by the report also stated that DRAM wholesale prices from April to June are expected to rise by 5-10% compared to January to March.

Another source cited by the report stated that the facilities required to produce HBM are approximately three times larger than those needed for producing general DRAM. If HBM production increases, the production volume of other DRAMs will decrease, thereby driving up prices. Another source cited in the report stated that supply cannot keep up with demand, and pricing power is currently in the hands of memory manufacturers.

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• [News] Samsung and SK Hynix Urgently Reallocate 20% of DRAM Production Capacity to Support Rising HBM demand
• [News] Three-way Contest for HBM Dominance, Uncertainties Surrounding China’s Supply Chain Involvement

(Photo credit: SK Hynix)

In 2023, startups globally experienced a depressing restructuring period, marked by the downfall of numerous unicorns. Now, as we move into 2024, investors and entrepreneurs within the startup community are shifting their focus to artificial intelligence (AI), recognizing it as the most exciting and promising technology.

The startup landscape last year could be likened to a “pandemic” of sorts, devastating numerous unicorns. According to the available data, the total funding of startups that ceased operations in 2023 surpassed USD 41 billion, a sum equivalent to the combined total of startup funding from 2019 to 2022. Noteworthy and high-valued startups that closed down in 2023 include Olive, a medical insurance startup valued at USD 4 billion; Convoy, a smart truck fleet developer valued at USD 3.8 billion; and Zume, a textile company focused on reducing plastic waste, valued at USD 2.3 billion.

Additionally, over 20 unicorns, including Notion, AirTable, and Grammarly that are well-known in Taiwan, have not launched a new fundraising round for two consecutive years. Amid this downturn, AI, particularly generative AI technologies and enterprises, has emerged as the brightest beacon in the gloomy global startup environment.

According to CB Insights, since the second quarter of 2023, startups incorporating AI-related technologies have seen at least a 20% increase in funding. For more advanced startups that have progressed to Series B funding and beyond, those focusing on AI have received a remarkable 59% increase in investment. A report from Startup Genome highlights that AI and big data were the most sought-after sectors by investors in 2023, comprising 28% of the total global startup investment for that year. Interestingly, at the 2023 Consumer Electronics Show in the United States, the largest share of participants from Taiwan (28%) was involved in AI and robotics. Furthermore, digital healthcare and smart cities/environmental sustainability, fields closely intertwined with AI, accounted for 20% and 18%, respectively, of the Taiwan-based participants.

The recent developments underscore a clear trend: AI has become a core technology across industries. Microsoft has not just invested a substantial USD 10 billion in OpenAI but is also comprehensively integrating AI into its products, workforce, and data management strategies to establish an early lead in this domain. Amazon and Google are closely following suit, each launching a series of AI application services. What has particularly stunned the industry is Apple’s recent decision to discontinue its electric vehicle project, which was a decade in the making. Instead, Apple is shifting its strategic focus, reallocating resources to accelerate the development of generative AI projects.

In summary, AI is undeniably the most significant trend within the startup ecosystem in 2024. While tech giants utilize their extensive resources to advance AI technologies, startups are concentrating on practical applications of AI in various fields. According to TrendForce analysts, three areas particularly warrant attention in 2024: cybersecurity, smart healthcare, and retail services.

Rapid Advances in AI Represent a Double-Edged Sword for Cybersecurity

On the frontline of cybersecurity, AI has emerged as a formidable tool for both attack and defense. Hackers use AI to simplify their attacks, whereas cybersecurity professionals use AI to identify vulnerabilities. Nevertheless, the reality of the cybersecurity sector is complex. The unpredictability of attacks, combined with the often passive approach of many companies towards data protection, means that the primary advantage of AI lies in its ability to mitigate rather than prevent incidents. TrendForce analyst P. K. Tseng notes that IT staff can employ AI tools to swiftly analyze attack vectors following a cybersecurity incident, thereby enabling them to promptly patch vulnerabilities and lower the risk of subsequent attacks.

Furthermore, owing to the shortage of cybersecurity talent, many IT personnel are also tasked with cybersecurity responsibilities. With the advent of generative AI, leading tech firms like Cisco and Palo Alto Network have started leveraging these technologies to streamline operations. As a result, IT staff in these companies can now execute previously complex and unfamiliar cybersecurity tasks through conversations in natural language.

Despite these advancements, deploying comprehensive and effective cybersecurity measures remains a costly endeavor for many small and medium-sized enterprises and end-users, often with benefits that are not immediately apparent.

To bolster data protection efforts, numerous manufacturers are now focusing on enhancing security measures at the upstream of their supply chains. For instance, Taiwan’s crucial semiconductor industry has seen the emergence of innovative startups like Jmem Tek. This company has revolutionized chip programming by incorporating fuse and anti-fuse technologies to transition from traditional single-bit to multi-bit methods. The innovative approach scrambles bit arrangements, thwarting hackers’ attempts at reverse engineering. Solutions like ones offered by Jmem Tek find applications in various fields, including IoT, automotive electronics, and electronic hardware protection.

Leading chip manufacturers such as Infineon, ARM, and NXP are increasingly adopting hardware protection strategies at the upstream, significantly contributing to the rapid growth of the cybersecurity market.

As cyber-attacks and data breaches become increasingly common, cybersecurity startups are facing significant growth opportunities.

Global Information estimates that the IoT security market alone will reach USD 6.6 billion by 2024, with projections suggesting it could grow to USD 28.01 billion by 2029, at a CAGR of 33.53% between the two years.

IDC predicts that by 2026, 30% of large enterprises worldwide will improve the efficiency their cybersecurity incident remediation, management, and response by investing in autonomous security solutions. Analysts, however, warn that cybersecurity is a highly sensitive area. Typically, businesses prefer to work with established cybersecurity firms rather than startups, and this poses a considerable entry barrier for new players. Hence, this scenario represents both a potential risk and an opportunity in the market.

As Foreign Healthcare Giants Pioneers the Use of AI in Precision Medicine, Taiwan-based Startups Follow Closely

Healthcare and pharmaceuticals rank among the industries with the highest investment in smart technology, particularly in drug research and development. Over the last decade, two-thirds of the drugs approved by the U.S. Food and Drug Administration have been small-molecule drugs. The development of these drugs has increasingly relied on AI technologies. Leading companies in this space include Recursion, Benevolent, and notably, Insilico Medicine.

In 2023, ISM5411, the world’s first cancer drug developed entirely through AI, advanced to Phase II clinical trials. This breakthrough serves as a remarkable milestone, showcasing the remarkable speed at which AI can innovate and produce new, lifesaving medications.

While the aforementioned drug startups may not be widely recognized, their influence within the pharmaceutical industry is profound. Insilico Medicine’s principal investor is Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson. Recursion’s principal investor is Leaps by Bayer, a subsidiary of Bayer.

Moreover, Roche Pharmaceuticals has partnered with several AI drug startups to accurately identify potential participants for drug trials, thus speeding up the development process.

“Smart healthcare,” seemingly lifted from a sci-fi movie, is gradually becoming a reality, thanks in part to AI. This is particularly evident with the development of the brain-computer interface technology, which involves implanting minuscule processors in the brains of patients with limb paralysis. This enables them to control digital devices, such as smartphones and computer mice, using their thoughts. Currently, two startups have initiated human trials for this technology: Neuralink led by Elon Musk and Synchron, the latter of which has received investments from Jeff Bezos and Bill Gates.

TrendForce forecasts that the global smart healthcare market is expected to surpass USD 360 billion by 2025. In Taiwan, the revenue from digital healthcare products and services reached TWD 50 billion in 2022. With advancements in AI, Taiwan-based startups related to smart healthcare have come under the spotlight, with 14% of local entrepreneurs venturing into this field.

Tailored for Individual Consumers: Smart Retail Unleashes Huge Business Opportunities

AI has long been anticipated to revolutionize the retail industry, yet its adoption has encountered setbacks, particularly with growing concerns over privacy. Furthermore, the once highly popular unmanned stores have seen their growth stall due to a range of factors. However, the emergence of generative AI holds the potential to usher in significant new changes.

“Retail technology is advancing towards greater customization, akin to a personal shopping consultant for each consumer,” stated TrendForce analyst Tseng. For example, the latest shopping service introduced by global retail giant Walmart leverages generative AI. Customers only need to make a general request, and Walmart’s AI system generates a comprehensive shopping list, giving them the freedom to choose which items to buy.

Today, when people shop online, they are accustomed to searching for the desired products, but this process still takes a lot of time, and it is easy to get distracted and browse for other items. However, with an AI-powered virtual shopping assistant, if someone wants to organize a barbecue for his family, the assistant will compile all the necessary items automatically.

Walmart’s AI shopping service is provided by Microsoft, with the underlying technology coming from OpenAI. Meanwhile, Google is set to integrate generative AI into its business-to-business (B2B) services. The e-commerce behemoth Amazon has also started testing a shopping assistant named Rufus AI, positioning itself to once again transform the retail landscape.

Beyond major corporations, Taiwan is fostering startups that use AI to expand smart retail across diverse markets. Carmi Technology, a local startup, targets health supplements, which are in high demand in the domestic market. The company introduced a one-stop customization service, enabling customers to tailor health supplements to their specific needs and avoid the clutter of numerous bottles and jars. This innovative approach positions Carmi Technology to capture more opportunities in this niche market.

AI Is Everywhere

Besides the rapid progress of startups in integrating AI in the aforementioned sectors, the presence of AI is ubiquitous in the startup scene of Taiwan and worldwide.

While this trend is very apparent this year, AI should not be regarded as the ultimate solution for everything. Taking the highly popular ChatGPT as an example, many users have started to notice a decline in the quality of responses. This issue could be due partly to users’ increased expectations, but it could also have to do with limited computational resources. In order to shorten response time and save on computing power, chatbot platforms might reduce the number of parameters in their machine learning systems.

The final and most important point is that regardless of the application markets where AI is adopted, the possibility of errors must be taken into consideration. Therefore, core decision-making ultimately needs to be handled by humans in order to prevent irreversible harm.

Join the AI grand event at Computex 2024, alongside CEOs from AMD, Intel, Qualcomm, and ARM. Discover more about this expo! https://bit.ly/44Gm0pK

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As a strategic technology empowering a new round of technological revolution and industrial transformation, AI has become one of the key driving forces for the development of new industrialization. Fueled by the ChatGPT craze, AI and its applications are rapidly gaining traction worldwide. From an industrial perspective, NVIDIA currently holds almost absolute dominance in the AI chip market.

Meanwhile, major tech companies such as Google, Microsoft, and Apple are actively joining the competition, scrambling to seize the opportunity. Meta, Google, Intel, and Apple have launched the latest AI chips in hopes of reducing reliance on companies like NVIDIA. Microsoft and Samsung have also reportedly made investment plans for AI development.

• Microsoft Announced an Investment Plan of over USD 11 Billion

Recently, according to multiple global media reports, Microsoft is developing a new AI mega-model called MAI-1. This model far exceeds some of Microsoft’s previously released open-source models in scale and is expected to rival well-known large models like Google’s Gemini 1.5, Anthropic’s Claude 3, and OpenAI’s GPT-4 in terms of performance. Reports suggest that Microsoft may demonstrate MAI-1 at the upcoming Build developer conference.

In response to the growing demand for AI computing, Microsoft recently announced a plan to invest billions of dollars in building AI infrastructure in Wisconsin. Microsoft stated that this move will create 2,300 construction jobs, and could contribute to up to 2,000 data center jobs when completing construction.

Furthermore, Microsoft will establish a new AI lab at the University of Wisconsin-Milwaukee to provide AI technology training.

Microsoft’s investment plan in the US involves an amount of USD 3.3 billion, which plus its investments previously announced in Japan, Indonesia, Malaysia and Thailand amount to over USD 11 billion in reference to AI-related field.

Microsoft’s recent announcements shows that it plans to invest USD 2.9 billion over the next two years to enhance its cloud computing and AI infrastructure in Japan, USD 1.7 billion within the next four years to expand cloud services and AI in Indonesia, including building data centers, USD 2.2 billion over the next four years in Malaysia in cloud computing and AI, and USD 1 billion to set up the first data center in Thailand, dedicated to providing AI skills training for over 100,000 people.

• Apple Reportedly Developing in-House AI Chip for Data Center

Apple has also unveiled its first AI chip, M4. Apple introduced that the neural engine in M4 chip is the most powerful one the company has ever developed, outstripping any neural processing unit in current AI PCs. Apple further emphasized that it will “break new ground” in generative AI this year, bringing transformative opportunities to users.

According to a report from The Wall Street Journal, Apple has been working on its own chips designed to run AI software on data center servers. Sources cited in the report revealed that the internal codename for the server chip project is ACDC (Apple Chips in Data Center). The report indicates that the ACDC project has been underway for several years, but it’s currently uncertain whether this new chip will be commissioned and when it might hit the market.

Tech journalist Mark Gurman also suggests that Apple will introduce AI capabilities in the cloud this year using its proprietary chips. Gurman’s sources indicate that Apple intends to deploy high-end chips (Similar to those designed for Mac) in cloud computing servers to handle cutting-edge AI tasks on Apple devices. Simpler AI-related functions will continue to be processed directly by chips embedded in iPhone, iPad, and Mac devices.

• Samsung might Start Pilot production for AI Inference Chip Mach-1

As per industry sources cited by South Korean media outlet ZDNet Korea, Samsung Electronics’ AI inference chip, Mach-1, is set to begin prototype production using a multi-project wafer (MPW) approach and is expected to be based on Samsung’s in-house 4nm process.

Previously at a shareholder meeting, Samsung revealed its plan to launch a self-made AI accelerator chip, Mach-1, in early 2025. As a critical step in Samsung’s AI development strategy, Mach-1 chip is an AI inference accelerator built on application-specific integrated circuit (ASIC) design and equipped with LPDDR memory, making it particularly suitable for edge computing applications.

Kyung Kye-hyun, head of Samsung Electronics’ DS (Semiconductor) division, stated that the development goal of this chip is to reduce the data bottleneck between off-chip memory and computing chips to 1/8 through algorithms, while also achieving an eight-fold improvement in efficiency. He noted that Mach-1 chip design has gained the verification of field-programmable gate array (FPGA) technology and is currently in the physical implementation stage of system-on-chip (SoC), which is expected to be ready in late 2024, with a Mach-1 chip-driven AI system to be launched in early 2025.

In addition to developing AI chip Mach-1, Samsung has established a dedicated research lab in Silicon Valley focusing on general artificial intelligence (AGI) research. The intention is to develop new processors and memory technologies capable of meeting future AGI system processing requirements.

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• [News] Microsoft to Build AI Data Center at Former Foxconn Planned Panel Plant Site in Wisconsin
• [News] Apple Allegedly Developing AI Processor for Data Centers, with TSMC as Its Foundry Partner

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