Advantest Corp is reporting a spike in demand for its chip-testing devices, catalyzed by a frenzy of interest in OpenAI’s ChatGPT and other novel uses of artificial intelligence (AI).
A global race to develop powerful computing clusters and next-generation AI training systems is spurring chipmakers to buy many more of the Tokyo-based company’s testing tools, Advantest cochief strategy officer Yasuo Mihashi said in an interview.
The executive’s outlook comes against a backdrop of muted demand for consumer electronics and a US-led campaign to restrict trade of advanced semiconductors to China. Japan last month said it would expand export controls on its chip technology.
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Still, the AI surge is driving up orders from Nvidia Corp and Advanced Micro Devices Inc, two companies that provide the key AI-training semiconductors and which rely on Advantest as their main testing tools supplier, data compiled by Bloomberg showed.
“We are the industry’s dominant player, so we benefit when something like ChatGPT expands uses of high-performance computing,” Mihashi told Bloomberg News in an interview.
Advantest expects operating profit in the fiscal year ended last month to rise by 48 percent to ￥170 billion (US$1.26 billion).
Data centers are essential for training and operating AI models that inform everything from autonomous driving to advanced chatbot assistants. That requires access to tens of thousands of graphics processing units (GPUs), which are presently the optimal hardware to analyze data in real time.
“Demand for data center GPUs and thus testers will surely grow fast even without China,” Ichiyoshi Research Institute Inc analyst Mitsuhiro Osawa said. “The hardware is necessary for next-generation social infrastructure such as autonomous driving and AI, the technologies that countries all over the world are investing in fiercely.”
The growing use of AI is pushing the limits of chip miniaturization and advanced packaging, raising the likelihood of defects during the manufacturing process, Bloomberg Intelligence analyst Masahiro Wakasugi said.
“This structurally boosts demand for chip testers, to help manufacturers guarantee performance and quality,” Wakasugi said.
Testers are also a key part of any bid by China to build its own advanced chips — something that the US has been pressuring allies to prevent. Since Advantest’s gear is not tied to a specific fabrication process, it might steer clear of Japan’s export restrictions, although that remains uncertain.
Advantest is “investigating whether our company is subject to export controls,” a company spokesperson said.
Advantest competes with North Reading, Massachusetts-based rival Teradyne Inc. Market share between the two can shift dramatically when a customer switches suppliers — which is extremely rare, as replacing testing tools necessitates a rethink of other equipment or entire production lines, as well as retraining staff.
Global revenue for high-performance GPU chip testers would likely overtake that for smartphone chip testers in a few years, Toyo Securities Co analyst Hideki Yasuda said.
“Chips for servers will get bigger and more complex, requiring more time for testing,” he said. “There’s no magic way to slash testing time. The only solution for chipmakers is to buy more tools to test more chips at the same time.”
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