What’s stopping Asia’s chipmakers from taking on Nvidia?

Nvidia’s rise from video game industry stalwart to the world’s most valuable public company has had some unintended consequences. For one, the semiconductor industry now seems to generate almost as much FOMO as it does revenue.

“There is a lot of buzz, and everyone wants a share of it,” says Ankush Wadhera, managing director, partner, and India leader of the semiconductor practice at Boston Consulting Group (BCG).

This transformation has led to thousands of AI chip startups across Asia, many founded by veterans of older, pre-AI companies such as Intel and AMD.

Like Nvidia, all of these startups are fabless, meaning they design chips but leave the manufacturing to specialist foundries.

But while there are thousands of startups each looking to build the next breakthrough chip in AI, there are only a few major fabrication facilities, such as TSMC and Samsung Foundry, the chipmaking division of Samsung Electronics.

For a startup trying to build at the frontier, a relationship with one of these foundries can matter as much as their chips, and these companies are now fighting to prove they have what it takes to get into these fabs.

A path beyond Nvidia

For firms looking at fabs with more advanced nodes – a term that describes a generation of chipmaking technology – TSMC is still pretty much the market leader in that space, says Chan Yip Pang, executive director at VC firm Vertex Ventures. Getting an allocation at TSMC is also typically not so easy, adds Pang.

To put nodes in perspective, a 3 nanometer (nm) node is considered more advanced compared to a 15nm node, as the former fits transistors closer together, which usually makes a chip faster and more power-efficient.

This also makes them much harder and more expensive to manufacture.

See also: Cerebras builds gigantic AI chips. Can SEA get its hands on them?

Despite the bottleneck caused by the lack of foundries, investors are still backing AI chip startups. Pang, for one, has invested in three semiconductor startups in Southeast Asia.

South Korea’s FuriosaAI, founded in 2017, is one of the few startups in Asia to have secured production for its advannced AI chips. Alex Liu, senior vice president of product and business at Furiosa, admits to Tech in Asia that the entire process was “very complicated,” requiring the startup to obtain TSMC capacity and gain access to high-bandwidth memory as well as packaging partners and customer validation all at the same time.

So far, the company has raised US$246 million and has shipped products to customers and partners including Samsung and LG.

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