Two trends you can’t ignore. China chip growth and AI Search.

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1 China = Chips

Reported in Electronics Weekly, Malcolm Penn, CEO of Future Horizons, said that China semiconductor?capex is now nearly half of global semi capex. Penn apparently said this is “a serious red flag” and, knowing him, the pun was very much intended, while the point was seriously meant. With China chip production expected to be up 60% in the next three years, this is a big proof that China’s strategy to ‘home grow’ a chip industry was crucial and correct. For China.?

While the boom in fab growth is global, China is ahead with 18 new fabs this year alone. What this means is not just a control of pricing but also standards.?What China supports, global players will need to support too.

The trade war will probably get worse as the USA attempts to resist the rising red tide, especially if Trump gets in again. Meanwhile, says EW, the EU is targeting 20% share for fab, which increasingly looks unrealistic. For chip business strategy, not having a robust plan for access for China is foolhardy in the extreme and yet I hear anti China sentiment almost daily from peers.?

I’ve said before that the “Next Arm” could be Chinese and based on a combination of RISV-V CPU, and architectures for GPU either built on RISC-V or acquired from the small number of remaining western GPU players (Imagination, X-Silicon, Think Silicon etc.)?

2 Nothing is unassailable. Even Google Search.?

I was just yesterday working on a presentation about my VIP Marketing Method (ask me about it anytime) and one thing in there was about the absolute nature of Google’s hold over search. Once upon a time, there was choice. Now, effectively, only Google matters.

And then today we hear that OpenAI’s GPT-4o is coming with features designed to create a fully convincing AI companion (like the movie ‘Her’).

It seems improbable to me that OpenAI is not working on search, as extended search capabilities would be a core part of an enablement that would create a more capable voice assistant than Apple’s Siri or Amazon’s Alexa (with the latter it’s hard to imagine how it could be any less capable). Google will clearly leverage search in future generations of Gemini, and unlike in phones, where owning search wasn’t a battle worth fighting, AI search is a high value and potentially differentiated feature.?

Hang on! I hear you say, isn’t search basically paid for by advertising? How will that work with AI chatbots? Don’t worry… there are many ways. Already key AI models are paid for, unlike search engines: I shell out about $20 for GhatGPT (Gemini is similarly priced as part of Google One AI) and another $60 or so for specialist tools. Or, specialist AI enabled search, like data analytics could command a per use fee. Personalisation, smart filters, etc. could be paid for too. That’s the tip of the iceberg.?Soon text based search could look as quaint as those pages that sold ad space by the pixel...

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