NVIDIA holds an absolute leading position in cloud AI GPU computing. However, the demand for Application-Specific Integrated Circuits (ASICs) is expected to remain strong in the coming years, which is a consensus in the market. More and more chip manufacturers are investing in this market through various means, with the first tier including MediaTek, Broadcom, Marvell, and others.
However, IC design experts candidly state that the later “second tier” seems to have a harder time achieving immediate revenue contributions.
Industry insiders familiar with the ASIC market assess that the leading groups currently visible, whether they are established ASIC manufacturers like WorldChip, or companies like Broadcom and Marvell that have successfully ventured into ASICs, or even MediaTek, which accelerated the development of SerDes technology IP after 2020 to find entry opportunities, all these manufacturers have cultivated the market for several years to secure orders and establish a foothold.
If manufacturers that want to enter the market in the last year or two are to see real revenue contributions, they may have to “wait a bit longer,” with the earliest possible results not expected until 2028.
Recently, both Arm, which has formed a new team through talent acquisition, and Qualcomm, which is ready to engage in cloud computing with SerDes and CPU computing technologies, have recognized the demand for cloud ASICs and the significant growth potential in the market, prompting them to officially enter the fray.
For large companies, market demand is expected to continue growing until 2030. Even if they enter the market later, increasing resource investment now still provides an opportunity to catch up with the growth trend.
However, the so-called second tier still needs to invest considerable time in technology development and market cultivation, and may even need to invest more effort to secure orders.
From the current development of various ASICs, it generally takes 1-2 years from project initiation to mass production. Considering potential delays in customer mass production timelines or adjustments to ASIC strategies, the time to reflect in revenue may take even longer.
For chip manufacturers that have recently entered the ASIC market, seeing related revenue by 2028 is not necessarily a pessimistic assessment.
Just looking at Broadcom’s dominance in the ASIC market, it is evident that cloud customers tend to choose market leaders for product development.
After all, being able to maintain a leading position and create a significant gap with other manufacturers clearly indicates that Broadcom’s technical capabilities and reliability are assured.
Even at this stage, MediaTek has managed to secure new orders from Google away from Broadcom, while Marvell and WorldChip are competing for AWS’s self-developed chips. However, aside from these traditional cloud service providers (CSPs), manufacturers with new demands generally choose Broadcom as their partner for the development of their first ASIC.
On the other hand, looking at the demand side for ASICs, even though there is considerable growth potential in the future, some ASIC manufacturers believe that there will be a concentration issue among leading groups in ASIC usage. Currently, Google and AWS, which have the largest scale of ASIC usage, are highly likely to become the customers with the greatest growth in demand. Unless they launch entirely new ASIC product lines or make significant adjustments to their ASIC development strategies, ASIC service providers will not see much change.
This also means that for later ASIC manufacturers, competing for orders from these major CSP customers will become increasingly difficult over time. While everyone may find survival opportunities in the market, competing for market share with the pioneers will not be easy.
The advantage of being an early mover is not guaranteed. Whether one can provide customers with the most comprehensive technical services while maintaining cost-effectiveness requires continuous resource investment.
However, later entrants are not entirely without the possibility of catching up. For instance, MediaTek has gone from being viewed skeptically about entering this market to now being able to secure Google orders from Broadcom.
However, if the customer structure for cloud AI ASICs does not undergo significant changes and adjustments, the difficulty for latecomers to catch up will be much higher than it is now.
What is certain is, as MediaTek CEO Cai Lixing publicly stated:
The cloud ASIC market is absolutely large enough to allow more chip manufacturers to join and contribute their strengths.