ARTIFICIAL INTELLIGENCE - THE NEXT BIG GROWTH DRIVER FOR THE SEMICONDUCTOR INDUSTRY - TANJEFF SCHADT, PWC STRATEGY
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Artificial Intelligence – The next big growth
driver for the semiconductor industry
Tanjeff Schadt, PwC Strategy&
www.strategyand.pwc.com
Prepared for SEMICON Europa, TechARENA
November 13, 2018
Welcome
Biography:
• 8 years of industry experience in management positions
(R&D, product portfolio, strategy)
• 7 years of strategy consulting experience in Semicon,
Electronics and Automotive industry
• Lead various projects at semicon clients, esp. with
Tanjeff Schadt focus on innovation, R&D and operational excellence
Principal
Munich, Germany
• Leading member of PwC’s semicon and technology
strategy practices
PwC Strategy& 2
PwC’s semiconductor industry consulting experience spans the entire
ecosystem and is unparalleled among consultancies
PwC Strategy& – Expertise in semiconductor industry
Our Semiconductor • 50+ major semiconductor industry projects in the past two years alone
Sector Consulting • Deep, global bench of >50 global consultants, with experience in all aspects of the semiconductor industry
Expertise • Extensive knowledge base of industry-specific best practices
Broad suite of offerings Project experience along the entire value chain
Value streams
Strategy
Product innovation & development
Capital project and infrastructure (PMC)
Supply chain
Marketing & sales
Technology consulting
PwC Strategy& 3We see that eight essential technology streams have emerged –
Artificial Intelligence (AI) is one of them
The Essential Eight Technologies
Internet of Things
• PwC is continuously tracking more than
150 technologies
Robots Augmented
Reality • The most impactful technologies emerged
as the essential eight
PwC
Essential
Eight • Each technology stream at PwC is
Drones Virtual represented with dedicated teams
Reality building a well-grounded foundation
of knowledge
3D Printing Blockchain • Artificial Intelligence is among our
essential eight technologies
Artificial Intelligence
PwC Strategy& 4The global semiconductor market will continue to grow –
AI is a major growth driver in the upcoming decade
Global Semiconductor Market [$ bn]
540 Total market: In the next decade we expect
$ 530 bn AI share growing to > $ 100 bn
CAGR 4.8%
AI share*:
495 $ 26 bn
+?
CAGR 3.7%
450
405
2017 2018F 2019F 2020F 2021F ...
Total global semicon revenue
Total global semicon revenue w/o AI
Source: PwC Strategy& analysis, IC Insights, JP Morgan *AI silicon market – foundry revenues, not exhaustive
PwC Strategy& 5Most attractive growth opportunities for AI are Automotive and Financial
Services – however, edge-based devices offer a huge untapped potential
Artificial Intelligence silicon – Market Overview SELECTION
Market Overview AI Classification
2021 Market Forecast Training Inference
Sample Use Cases ($ bn) System System
1.0 2.0 3.0 4.0 5.0 6.0
Edge-based devices for • Deep-learning wireless camera
consumer electronics • Augmented human decisioning
• ADAS, Driver safety systems
Automotive
• Infotainment
• Authentication
Financial Services
• Portfolio Management
• Disease Prevention
Healthcare
• Diagnosis
• Network Security
Tech, Media, and Telecom
• Personal Assistants
• Customer Insights
Retail
• Pricing Analytics
• Manufacturing Automation
Industrial
• Proactive Failure Detection
• Monitoring & Security
Smart Buildings
• Energy Efficiency
Source: PwC Strategy& analysis, IDC, Allied Marker Research, Tractica Cloud Edge
PwC Strategy& 6Semicon innovation will boost the market for AI silicon in Automotive
electronics to $5.3 bn until 2021
Artificial Intelligence silicon – Automotive electronics
AI silicon forecast within Automotive Electronics Market Forecast 2021 ($B) Comments
72.5 30.0 26.7
Aftermarket 3.6 Analog 1.4 • AI use cases for Automotive will
Discrete 2.0 be centered around
Body 13.1 2.0
Non-optical sensors infotainment, driver safety and
Optoelectronics 2.6
Chassis 8.3
autonomous driving
Memory 4.1
EV/HEV 5.8
General purpose logic 0.9 Non-AI 21.4 • The ingredient devices that will
Instrument cluster 4.5 drive the AI use cases will be
Microcomponents 3.8
Powertrain 7.2
ASIC 0.6 mainly focused on sensing,
compute and storage
Infotainment 12.5
Safety 6.9 ASSP 12.7 • AI-focused silicon will gain
~20% share of overall Auto
AI 5.3
ADAS 10.6 electronics market until 2021
Applications Device category AI forecast (ADAS,
safety & infotainment)
Source: PwC Strategy& analysis, Gartner, Allied Market Research ASIC: Application Specific Integrated Circuit ASSP: Application Specific Standard Product
PwC Strategy& 7The AI stack consist of multiple building blocks – innovation is brought across
the stack to various target applications and use-cases
The Artificial Intelligence Stack ILLUSTRATIVE
Stack Element Description Examples of Solutions and Vendors
Applications & Software applications leveraging AI for
Services “intelligence” Alexa
Ready-to-use building blocks and services that
AI Platforms provide a host of AI capabilities (often Current
proprietary) Watson battleground: where
will AI be processed?
Tools and frameworks to leverage underlying
AI Frameworks, Tools
ML algorithms to design, build, and train deep
and Interfaces
learning models for specific applications
Tools to optimize
deployment to hardware
A set of low-level software functions that help architecture
AI Libraries optimize the deployment of an AI framework MKL cuDNN Snapdragon ARM NN
on a specific target silicon DL SDK
Vision SDK
Tensor RT NPE SDK
Processor units and semiconductor logic circuits
AI Hardware
for accelerated execution of AI workloads / AI-optimized silicon
(Accelerator vs.
computations as well as adaptable AI Nervana NNP Telsa Snapdragon ARM ML Loihi architectures
Edge Processing) NPE
processing on the edge
PwC Strategy& 8Most chip vendors are providing AI-specific acceleration to enhance their
existing product portfolios …
Artificial Intelligence Stack – Current Status (1/2) EXTRACT
Chipmakers IP Licensors
Datacenter Datacenter
ADAS Automotive
Target Self-driving cars Self-driving cars Voice assistants
Drones Vision Processing Computer Vision Surveillance
Appli- AR/VR Retail Analytics Computer vision Consumer robots
Datacenter for ADAS Smart Driving Drone
cations Drones Smart Cities Smartphones
Medical Mobile / Wearable
Surveillance Surveillance
MKL
S32 Design Tensilica NN
AI DL SDK cuDNN Snapdragon NPE reVISION STM32
Studio IDE ARM NN mapper toolkit
Libraries Vision SDK Tensor RT SDK SDAccel Toolkit STM32 Cube
Vision SDK DSP SDK
Myriad Dev Kit
Cortex-A75
CPU Xeon PHI
Cortex–A55
Hexagon 685
Tensilica Vision
DSP DSP (Snap-
C5 DSP
AI Pro- dragon NPE)
cessing Pascal, Volta
GPU
HW / Maxwell, Tesla
Silicon Zynq
FPGA Arria 10
MPSoC
Nervana NNP
S32V Vision AI SoC for
Custom Myriad X ASIC – TPU ARM ML
Processor DCNN
Loihi NMP
Training Inference Both
PwC Strategy& 9… however, they face an unexpected threat from hyperscalers and product
companies, who are gravitating towards customized chips for AI processing
Artificial Intelligence Stack – Current Status (2/2) EXTRACT
Cloud Player Others (Product Companies)
Image search
Target Facial recognition Digital Search
Voice search Facial recognition Face ID
Appli- Text-to-speech Transformation Voice Assistant Self-driving cars
Translate Animated emoji Animoji
cations Smart Assistant Intelligent Assistant Computer Vision
Smart Reply
Video API
Bing API
AI AWS DL AMI Vision API
Face API Core ML
Libraries Xilinx SDAccel Speech API
Analytics API
NL API
CPU
DSP
AI Pro-
cessing
GPU GPUs GPUs GPUs
HW /
Silicon Project
FPGA
AWS EC2 F1 Brainwave Cloud Server
AI chip for Edge AI chip for Cloud TPU Neural Engine Neural Engine
Custom
(Alexa) Hololens TPU (Exynos 9) In-car chip (A12 Bionic)
Training Inference Both
PwC Strategy& 10Four main forces will shape the AI opportunity for semiconductor players in the
coming years
Main Forces shaping AI Opportunities
Ever broader accessibility Domain-specific Proliferation of AI Evolution of AI algorithms &
of AI architectures at the edge technologies
• Development of applications is • Semiconductor node scaling • AI becomes increasingly • Current AI technologies are far
increasingly supported by very expensive, and feasible away from enabling general
platforms, frameworks, libraries, increasingly so in small form factors intelligence
sensors • Fabs offer standard IP • Cost of data transmission • Ability to test and validate AI
• Entry costs become increasingly • Proliferation of IoT outside to the cloud behavior is a big question mark
lower, but so is ability to of PC and datacenter • Latency becomes critical • Evolution in AI algorithms will
differentiate for application • Data privacy concerns continue, raising the need to
makers adapt silicon
• AI is an open battleground • Winning horizontal solutions • Growth in edge devices and • The capability to understand
• AI features: a must in many very expensive to develop applications AI evolution and implications
devices / applications • Pockets of value in • Related pull in sensors holistically is critical
• Differentiation for application increasingly fragmented • Growth in intelligent device
makers becomes complex, industry applications testing and management
not pure AI-driven
PwC Strategy& 11Semiconductor players should define their distinct way to play in AI
Pure-Play Archetypes SELECTION
Outsourced
Horizontal Industry application
solution
solution leader leader
designer
Examples
• Standard silicon for the largest cross- • Customized silicon, based on standard • Design and fabrication services
industry application segments e.g. data or proprietary IP • Integration of customer requirements or
center • Application-specific integration and standard IP, as required
Product portfolio • Broadly applicable software tools testing tools • Multi-purpose packaging, assembly and
• Focus on interoperability and • Possibly proprietary software and testing services
compatibility algorithms
• Ecosystem, partnership and alliance • Deep customer intimacy • Customer requirements understanding
management • In-depth AI application stack & relationship management at scale
Core • Breakthrough innovation in R&D and understanding • Customer segmentation and selection
differentiating fabrication • Solution integration & selling • External R&D integration
capabilities • Channel management • Application-specific customer support
PwC Strategy& 12In recent years the AI start-up landscape gained momentum –
funding of semicon start-ups is back again
Semiconductor AI Start-up Landscape EXTRACT
Start-up Founded HQ (GEO) Stage Funding to Date ($ m) Strategic Investors Technology
Cambricon Technologies n/a China Series A 101 Alibaba Deep learning processor
CyberSwarm n/a San Mateo, CA Seed 1 None AI-assisted cybersecurity CPU
Graphcore n/a UK Series C 110 Samsung, Dell Deep learning processor
Horizon Robotics 2015 Beijing, China Series A 100 Intel Vision DSP
KnuEdge n/a San Diego, CA n/a 47 None Neuromorphic processor
LightOn 2016 Paris, France Seed 0 n/a Optical/quantum AI computing
Movidius n/a San Mateo, CA Series E 56 Intel Neural Compute Engine Accelerator (Appl: Vision DSP)
Mythic n/a Redwood City, CA Series A 9 n/a Neuromorphic processor
Nervana n/a San Diego, CA Series A 25 Intel Deep learning processor
Reduced Energy Microsystems 2014 San Francisco, CA n/a 2 n/a Deep learning processor
Rigetti Computing 2013 Berkeley, CA Series B 70 n/a Optical/quantum AI computing
Tenstorrent 2016 Toronto, Canada Seed 0 None Deep learning processor
Vayyar 2011 Yehud, Israel Series C 80 n/a Vision DSP
Vicarious 2010 San Francisco, CA Series C 137 Samsung Neuromorphic processor
Wave Computing 2010 Campbell, CA Series D 117 Samsung Deep learning processor
Xanadu 2016 Toronto, Canada Seed 3 n/a Optical/quantum AI computing
Cerebras 2016 Los Altos, CA Series B 112 n/a Deep learning processor
ThinkCI n/a n/a n/a 0 n/a n/a
Knowm 2015 Santa Fe, NM n/a 0 n/a Neuro-memristive processors (Thermodynamic RAM)
ThinkForce 2017 Shanghai, China n/a 0 No AI Acceleration Engine
Groq 2016 Palo Alto, CA n/a 0 No n/a
Gyrfalcon n/a n/a n/a 0 n/a n/a
Source: Strategy& research, Crunchbase
PwC Strategy& 13Innovative chip architectures in AI compute are increasingly VC funded –
majority of early stage funded start-ups are headquartered in China
The AI Start-up Scene
VC funding in Semiconductor AI start-ups, $M (2012-2017) 2017 Funding Breakout by Stage and Region
3x
Rising number of start- 748 Series D 13% 35% EMEA
Late Stage
ups are targeting new Start-ups founded in
silicon architectures that EMEA and AMER
are optimized to meet continue to show growth
the unique processing Series C 35% 65% AMER and promise based on
requirements posed funds awarded
by AI workloads
Series B 9% 20% AMER
4x
Early Stage
A vast majority of early
214 stage funding in 2017 was
Series A 43% 80% APAC awarded to start-ups
90 headquartered in China
Seed
1%The silicon required for Level 5 autonomous driving is likely already available –
power consumption and form factors still evolving
Evolution of relevant IC Alternatives for in-car AI Inference EXAMPLE: AUTONOMOUS DRIVING
Intel Nervana
Tera-operations **
256 Lake Crest 2.0
per second (TOPS) IBM TrueNorth
in 32 bit floating point precision (fp32)
128
64
~25 TOPS @ fp32 Intel Nervana
32 Google TPU 2.0 Lake Crest **
Approximate computing power required for
inner-city autonomous driving with current algorithms* MobilEye EyeQ5
16 Inference only – AI training in the cloud Nvidia Tesla V100
Nvidia Tesla P40
Nvidia Tesla P100
8 Claimed to be able
Intel Xeon Phi 7250
to support SAE L5
4 Nvidia Tesla K40
by 2020
2 MobilEye EyeQ4
1 Intel Xeon E5-2697 v4***
MobilEye EyeQ3
2013 2014 2015 2016 2017 present 2020
* Based on Google estimates (2016) – estimate of 50 TOPS at floating point 16 bit precision, i.e. approx. 25 TOPS at floating point 32 bit precision
** Illustrative based on current Intel press releases. Exact performance and power consumption not announced
*** Representative example of Intel Xeon family Specialized Specialized AI processor /
CPU GPU
GPU/VPU Neuromorphic chip
Source: Strategy& desktop research June 2017; some devices incorporate multiple dies, e.g. Google TPU 2.0 Circle size indicative of relative power consumption
PwC Strategy& 15AI is THE opportunity for European semicons
The opportunity There are plenty of Don‘t forget
is big! growth options! the ecosystem!
• What is your strategy for • We are in an early phase – • Edge is core capability of
Artificial Intelligence? core is still an opportunity European semicons
• European semicons can • What is your answer on how to
build core AI in Asia play in the ecosystem?
European semiconductor companies have the know-how and a right to win –
you better have a strategy!
PwC Strategy& 16European semicon players shall take advantage of AI in cooperative mode
Where to play?
AI is application driven –
what are the most relevant Cooperate
applications for you?
Forget what you can do on
Way to play?
your own:
You better have a strategy!
What can you achieve
How to play?
together in the European
semicon industry?
What is the right
spot in the AI
ecosystem? ?
PwC Strategy& 17Outlook: Global Semiconductor Report 2018 coming soon
PwC Semiconductor Report Series
• The PwC Semiconductor Report Series provides an overview of market
developments, growth opportunities and success factors of the global
semiconductor market
• It includes a forecast on global semiconductor billings by component,
region and application
• The reports also covers highlight topics and their implications on the future
of the industry – past topics included the Internet of Things (2015) and a
spotlight on Automotive (2013)
• The two highlight topics in 2018 will be:
Artificial intelligence – the next big growth driver
Digitization of semiconductor companies
PwC Strategy& 18www.strategyand.pwc.com/strategythatworks
PwC Strategy& 19Contact
Phone: +49 89 545 255 21
Mobile: +49 15 167 330 436
Email: t.schadt@strategyand.de.pwc.com
PwC Strategy& (Germany) GmbH
Bernhard-Wicki-Straße 8
80636 München
Tanjeff Schadt
Principal
Semicon expert
www.strategyand.pwc.com/de
PwC Strategy& 20Thank you
© 2018 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network
of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual
member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or
any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts
or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in
any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control
the exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way.
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