Weekly News
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1.?Dell has raised its full-year forecast, with AI server backorders reaching $3.8 billion.
2. IBM is the first to adopt Intel's Gaudi 3 AI accelerator, which is expected to drive demand for high-capacity, high-performance storage products.
3. Microsoft has revealed the specifications for its Maia 100 AI chip.
4. Apple and NVIDIA are discussing investing in the AI research lab OpenAI.
5.?Apple has started producing the latest iPhone 16 in India.
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1.?Dell has raised its full-year forecast, with AI server backorders reaching $3.8 billion.
Dell released its financial results for the second quarter of fiscal year 2025, ending on August 2, 2024: Revenue was $25.026 billion, up 9% year-over-year; Non-GAAP operating profit was $2.034 billion, up 3% year-over-year; and net profit was $1.371 billion, up 7% year-over-year.
The Client Solutions Group (CSG), focused on personal computers and laptops, reported second-quarter revenue of $12.414 billion, down 4% year over year. Within this segment, commercial PC revenue was $10.556 billion, flat quarter over quarter, while consumer PC revenue was $1.858 billion, down 22% year over year.
By business segment, the Infrastructure Solutions Group (ISG) achieved record revenue of $11.646 billion in the second quarter, up 38% year-over-year. Server and networking revenue reached a record $7.672 billion, up 80%, driven by growing demand for AI and traditional servers. AI momentum began to accelerate in the second quarter, with AI server demand reaching $3.2 billion, up 23% quarter-over-quarter. However, storage revenue was $3.974 billion, down 5% year-over-year.
With surging demand from cloud service providers, Dell has become a significant supplier of AI servers. According to Chief Operating Officer Jeff Clarke, a backlog of $3.8 billion in AI server orders has yet to be fulfilled. Additionally, enterprises and cloud service providers are negotiating several billion dollars worth of potential AI server deals. Clarke also noted that enterprises remain a significant opportunity for the company, as many are still in the early stages of AI adoption.
Comment:?This year, global tech companies have ramped up AI investments, expanding data centers and increasing demand for high-capacity, high-performance storage. This boosted the storage market in the first half. In the second half, North American internet companies are increasing capital expenditures, driving strong demand for QLC SSDs, DDR5, and HBM, with higher acceptance of price increases.
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2. IBM is the first to adopt Intel's Gaudi 3 AI accelerator, which is expected to drive demand for high-capacity, high-performance storage products.
IBM Cloud has announced the integration of Intel's Gaudi 3 AI accelerator. By early 2025, IBM Cloud will launch advanced cloud services combining Intel's Gaudi 3 AI accelerator with the 5th Gen Xeon processors, focusing on optimized support for generative AI inference workloads.
IBM Cloud plans to fully support Gaudi 3 on its AI and data platform, Watson. This will offer customers enhanced AI infrastructure to scale AI workloads more effectively?in hybrid cloud environments and significantly improve the cost-efficiency of model inference. Alan Peacock, IBM Cloud's General Manager, emphasized IBM Cloud's commitment to delivering solutions that meet customer needs, driving innovation in AI and hybrid cloud while ensuring security and resilience.
Comment:?As global tech companies increase AI investments, demand for high-performance storage is rising, strengthening the storage market. Despite strict requirements in server data centers, AI-driven demand remains strong. Storage manufacturers focus on the enterprise market, making it a key growth area.
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3. Microsoft has revealed the specifications for its Maia 100 AI chip.
At the Hot Chips 2024 conference, Microsoft revealed the detailed specifications of its first custom AI chip, Maia 100. Manufactured using TSMC's 5nm process, the chip measures 820 square millimeters and features 1.8TB/s HBM2E bandwidth and 600GB/s backend network bandwidth. With a design TDP of 700W and a provision TDP of 500W, Maia 100 is tailored for large-scale AI workloads on the Azure cloud platform, offering high-speed Tensor units, vector processors, and Ethernet-based interconnects for ultra-high bandwidth computing.
Comment:?Microsoft also introduced the Maia Software Development Kit (SDK), enabling developers to easily deploy PyTorch and Triton models to Azure OpenAI services.
4. Apple and NVIDIA are discussing investing in the AI research lab OpenAI.
This investment will be part of a new funding round for OpenAI, which is expected to raise the company’s valuation to over $100 billion. Venture firm Thrive Capital will lead the round, with Microsoft also likely to participate. The specific investment amount is not yet known.
Comment:?OpenAI's valuation has soared due to rapid advancements in generative AI and expectations of its economic impact. NVIDIA's revenue doubled over the past year, reaching $30 billion, while OpenAI's revenue hit $2 billion early this year. However, concerns about profitability from costly AI models persist. OpenAI faces growing competition from Anthropic, Google, and Elon Musk's xAI, which recently raised $6 billion to compete with ChatGPT.
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5. Apple has started producing the latest iPhone 16 in India.
In India, Apple has begun mass production of the new iPhone 16 series, including the Pro models. This shift highlights Apple's efforts to build its supply chain outside China. Previously, China produced the latest and high-end iPhones, while Indian suppliers only handled lower-end or older models. As Apple seeks greater supply chain flexibility, this has changed recently.
According to supply chain reports, India assembled around 30 million iPhones last year, with about 18 million assembled in the first half of 2024 alone. These devices are not only for the Indian market but also exported to countries like the U.S. Counterpoint Research analyst Ivan Lam notes that India benefits significantly as a major smartphone assembly location outside China, with brands aiming to diversify production and enter the Indian market.
Comment:?The production of higher-value electronic and mechanical components remains concentrated in China. While India has progressed, its efficiency, infrastructure, and talent pool still lag behind China's capabilities. Most iPhones are still assembled in China to ensure a smooth supply chain.
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