In the field of chips, big things keep happening!
According to foreign media reports, the German government plans to provide approximately 2 billion euros in new subsidies to the chip industry. The new funds will be provided to chip companies for 10 to 15 projects, including the production of unprocessed wafers and microchip assembly. Earlier, the South Korean government announced that it would urgently invest over 14 trillion Korean won (approximately 10 billion US dollars) in policy financing to cope with uncertainty from the new US government and increasingly fierce competition in the chip industry.
Recently, there were reports that in order to challenge Nvidia's monopoly in the field of artificial intelligence (AI) chips, tech giant Amazon is intensifying the development of a new AI chip called Trainium2. Compared to the previous generation product, its performance has improved fourfold, memory capacity has increased threefold, and it has significant advantages in efficiency and cost.
Germany provides huge subsidies to the chip industry
According to Bloomberg, the German government is preparing to make billions of euros in new investments in the country's semiconductor industry.
On Thursday local time, Annika Einhorn, spokesperson for the German Ministry of Economy, stated in a statement that new funding will be provided to chip companies to develop "modern production capabilities far beyond current technological levels. According to reports, Einhorn did not publicly disclose the specific subsidy amount. However, two individuals who participated in this week's official event regarding the funding program said that the expected total subsidy amount is about 2 billion euros, and the final figure may change.
Earlier this month, the German Ministry of Economy issued a call for chip companies to apply for new subsidies. The new German government will be elected in February next year and may formulate its own budget, leaving uncertainty for chip companies that are applying for subsidies.
Governments around the world have been investing public funds in the chip industry to achieve localized production of chip components, which control everything from cutting-edge artificial intelligence to everyday devices. The European Chip Act, passed in 2023, aims to strengthen the EU's semiconductor ecosystem by doubling its market share to 20% of global production capacity by 2030.
However, recently, the German chip industry has faced two major setbacks. Intel has shelved plans to build a € 30 billion chip factory in Magdeburg, which was expected to become the largest project supported by the EU chip bill and receive € 10 billion in subsidies. But Intel, the struggling American company, postponed its plans in September. In addition, Wolfspeed Inc. and ZF Friedrichshafen AG have also cancelled their plans to establish a chip joint venture in western Germany.
According to the European Chip Act, Germany's first round of chip subsidies was granted to Intel, as well as a joint venture between Infineon and TSMC in Dresden.
The German Ministry of Economy hopes to use the newly proposed funding to support 10 to 15 projects across multiple fields, including the production of unprocessed wafers and microchip assembly. Einhorn said, "The funded projects should help Germany and Europe establish a strong and sustainable microelectronics ecosystem
South Korea is also strongly supporting the chip industry. The South Korean government will urgently invest over 14 trillion Korean won (approximately 10 billion US dollars) in policy financing to rescue the domestic semiconductor industry facing crisis, in response to uncertainty from the new US government and increasingly fierce competition in the chip industry. This is the second time in five months that South Korea has introduced new measures, following the announcement of the "Semiconductor Ecosystem Support Plan" worth 26 trillion Korean won in June this year.
On the 27th, the South Korean Ministry of Finance announced that in order to continue implementing stimulus policies, it will provide financial support including loans from state-owned banks next year, with an amount of 14.3 trillion Korean won. In addition, the South Korean government stated in a statement that it plans to bear a "significant portion" of the 1.8 trillion Korean won required for underground cable laying in the Longin and Pyeongtaek chip industry clusters in southern Seoul to support enterprises in the new chip park. South Korea is building what it claims to be the world's largest high-tech chip manufacturing cluster, aiming to attract related companies.
The South Korean government also plans to increase the tax credit rate for semiconductor related companies by 10 percentage points by 2030 and build a national "Artificial Intelligence Computing Center" with a scale of 4 trillion Korean won.
Amazon challenges Nvidia
Recently, it was reported that Amazon is currently intensifying the development of a new AI chip, Trainium2, at its engineering laboratory in Austin, Texas. Compared to the previous generation product, its performance has improved fourfold, memory capacity has increased threefold, and it has significant advantages in energy efficiency and cost. Amazon hopes to reduce the procurement cost of AI chips and improve overall efficiency in data processing through these optimizations.
According to reports, this chip is Amazon's third-generation product in the AI hardware field, aimed at providing a more efficient and cost-effective solution for machine learning model training. The product plan is to complete testing and delivery before the end of this year.
Amazon's chip business is led by James Hamilton, who was one of the pioneers in the field of cloud computing. Hamilton's team proposed the idea of independently developing chips as early as 2013. Amazon's first AI chip, Inferentia, was launched in 2019, focusing on inference tasks, while the Trainium series is primarily aimed at training machine learning models. At present, Amazon's Trainium2 chips have begun to be deployed in data centers and are expected to be widely promoted in multiple core data centers, including Ohio, soon. Amazon's goal is to string Trainium2 into clusters of up to 100000 chips.
Amazon's self-developed chip development plan aims to challenge Nvidia's current monopoly in the field of artificial intelligence (AI) chips. However, due to Nvidia's continued leading position in technology updates and market share, market participants believe that its competitive advantage is difficult to shake in the short term.
It is worth noting that Amazon has recently invested a huge amount of money in the AI field. On the 22nd, Amazon announced an additional investment of $4 billion in the artificial intelligence company Anthropic, bringing Amazon's total investment in Anthropic to $8 billion. Anthropic is known as OpenAI's arch rival, and media analysis suggests that Amazon's move indicates that the competition for artificial intelligence among tech giants is becoming increasingly fierce.
Anthropic was founded in 2021 and is headquartered in San Francisco, USA. It is a company founded by former OpenAI executives in 2021, focusing on creating interpretable, secure, and controllable artificial intelligence systems. The company's flagship artificial intelligence model, Claude, operates based on "Constitutional AI," an AI model that uses predefined principles to guide its output, avoiding some erroneous or discriminatory output reactions.
The binding between Amazon and Anthropic is quite tight. On the one hand, Amazon is an important investor in Anthropic. Amazon has previously invested in Anthropic twice, participating in two rounds of financing of $1.25 billion in September 2023 and $2.75 billion in March of this year. On the other hand, Amazon is an important supplier to Anthropic, which purchases a large number of cloud computing and chip products from Amazon. However, Amazon does not prevent Anthropic from collaborating with other suppliers such as Google and Nvidia.