• April 10, 2017, 3:54 P.M. ET

Intel, Nvidia et al.: A.I., China Among ‘Tectonic Shifts,’ Says Pac Crest

 

 

 

By Tiernan Ray

Pacific Crest’s Michael McConnell, John Vinh, and Weston Twigg, who recently shook up their firm’s semiconductor stock ratings, today issued a deck of slides to clients on what they term the “tectonics” of the chip world, with “seismic” shifts happening.

The authors continue to be positive on Broadcom (AVGO), Intel (INTC), Skyworks Solutions (SWKS), and Cirrus Logic (CRUS), among others, while they continue to hold a Sell rating on shares of Nvidia (NVDA).

The authors mention several driving forces in chips, including the rise of artificial intelligence in computing, and China’s desire to be a semiconductor powerhouse.

Their overall conclusion is that these tech trends will lead to “new architectures” in chip design:

We view the next wave of compute workloads, including 5G, artificial intelligence, machine learning, autonomous vehicles and cloud computing, as being a disruptive force in driving tectonic shifts in compute architectures. We see a wide range of compute architectures, including a shift from homogenous to heterogeneous compute and from centralized to edge computing.

Also, the trends are going to push more computing cycles to the “edge” of networks, out of the data center:

We anticipate emerging next-generation compute workloads will drive a shift to edge compute, shifting workloads from the data center and increasingly to the edge and network.

As far as China, the authors note that “many new fab projects are planned through 2020,” though one has to ask “which ones are real?” they write.

As their infographic suggests, the actual spend on such projects is still considerably murky (click on the picture to see it larger):