AI Fuels Smart IoT Chip Development

As we step into the bright horizon of 2024, the world of intelligent Internet of Things (IoT) technology stands at a significant turning pointThe convergence of artificial intelligence (AI) and IoT, known as AIoT, is not merely a theoretical concept but a burgeoning reality fueled by advancements in System on Chip (SoC) technologyThese SoC chips act as the brains behind smart devices, facilitating efficient edge computing processesThis technological synergy is pushing various terminal devices into a new era of intelligent interaction, thus, was sparking a cyclical boom in the upstream chip industry.

AIoT, a fascinating amalgamation of AI and IoT, has taken a decisive leap forward since the second half of 2023, thanks to the commercialization and development of high-performance SoC, Wi-Fi chips, and high-definition video decoding chipsThe recuperation in the performance of AIoT-related chip companies has been notable, with some achieving performance levels surpassing their historical peaks by the first quarter of 2024, heralding a resurgence of market vitality.

A prominent example of this transformation is the rise of generative AI systems, like ChatGPT, which is revolutionizing how we interact with smart home devicesThe potential applications for such systems extend to smart speakers, wearables, and other smart home productsAs these devices enhance their feedback capabilities and accuracy in interpreting user intentions, they are set to significantly transform consumer experiencesFurthermore, AI-powered SoCs are positioned to grow robustly, with projections indicating that the Chinese AIoT SoC chip market will reach a staggering 279.4 billion Yuan by 2027.

The profitability landscape of the chip design industry has seen rocky waters in 2022, with sluggish trends in consumer electronics impacting related chip products' profits and pushing the industry into a downturn

Advertisements

However, chip design firms have remained committed to extensive R&D investments, paving the way for the development of the next generation of chipsAIoT SoC chips serve as the core integrated chips for controlling AIoT devices, packing a multitude of functionalities — from processors and audio/video codecs to memory systems and network interfacesThese chips not only address the upgrade needs of consumer electronics but also incorporate AI processing, audio-visual processing, and intelligent voice functions.

As inventory issues are resolved and high-performance chips infiltrate the commercial market, AIoT SoCs have begun to emerge from their slump as of the second half of 2023. Companies like Espressif Systems have reported a remarkable increase in revenue, with a 12.7% year-on-year growth, and a staggering 63.6% leap in net profitsEspressif's chips have evolved from the niche of Wi-Fi microcontrollers to the broader domain of AIoT SoCs, reflecting a positive adaptation to market demandsSimilarly, companies like Hengxuan and Allwinner Technology reported astonishing revenue increases of 46.6% and 12.4%, respectively, showcasing the collective recovery of the sector.

The trend of localizing and miniaturizing large AI models for edge and terminal deployments has become increasingly apparentIn the first quarter of 2024, Rockchip experienced considerable growth across automotive electronics, industrial applications, and machine vision, realizing revenue growth of approximately 64% to 67%, along with impressive net profitsThis marks a stark contrast to the losses faced in previous years, suggesting a robust recovery trajectorySimilarly, Amlogic achieved a revenue of 1.38 billion Yuan in early 2024, illustrating a growth rate of 33.1%, positioning itself closely to its historical revenue record.

The allure of SoC technology lies in its high integration, low power consumption, and compatibility across multiple formats, particularly evident in areas like video encoding and visual processing

Advertisements

For wearable devices such as True Wireless Stereo (TWS) earphones and smartwatches, the SoC market thrives on long-tail customers whose fragmented needs do not align neatly with the business models of major chip manufacturersThis allows domestic companies to exploit a gap in the market, focusing on creating low-power solutions that extend battery life and enhance functionality.

In the realm of ultra-high-definition video, the emergence of devices supporting 8K decoding marks an exciting chapter for consumer electronicsThe relevant standards for ultra-HD video will be enforced in November 2023, leading to a surge in demand across sectors such as healthcare, surveillance, and smart transportationThe continuous technical breakthroughs in 8K resolution and associated chip technologies are ushering the industry toward rapid maturation, significantly increasing the volume of related chip shipments.

In the context of smart cities and homes, Wi-Fi technology plays a pivotal roleHistorically, 2.4GHz and 5GHz frequencies dominated this space, but the evolving landscape now demands technologies that can accommodate ultra-high throughput and low-latency applicationsThe development trajectory of smart homes, cities, and industrial IoT requires Wi-Fi solutions that continually evolve to deliver faster speeds and higher data qualityAs competition intensifies in the market, with various manufacturers racing to offer cost-effective yet high-quality hardware, domestic players are expected to benefit immensely from the continuous infiltration of AIoT technologies.

As we glance at the latest advancements in consumer electronics within the smart home arena, innovations aboundRobotic vacuum cleaners, wearables, smart speakers, and smart TVs have become household essentialsThe sweeping robot market, in particular, has seen rapid recovery in 2023, with domestic brands successfully rolling out AI-integrated products that excel at navigation and obstacle avoidance

Advertisements

In response to this shifting market, manufacturers have developed next-generation high-performance chips tailored for advanced robotic vacuum cleaners.

Wearable device manufacturers are increasingly harnessing generative AI's powerSmartwatches, leveraging deep learning and natural language processing, can understand user behavior and language, providing tailored suggestions and servicesProducts like robotic lawnmowers and biobots require advanced AI algorithms for intuitive navigation, necessitating ongoing advancements in sensors and related technologies from chip manufacturers.

The explosion of smart speaker sales reached its zenith in 2018 and 2019, yet the market faced challenges due to slow advancements in smart features, resulting in widespread product homogeneity and consumer dissatisfactionAfter peaking in 2020 with 37.85 million units sold, sales plummeted 28% in 2022. As traditional IoT markets hit growth plateaus, leading companies are seeking to integrate large AI models into smart speakers, potentially igniting new demandIt's anticipated that smart speaker sales will stabilize around 20 million units annually from 2024 onwards.

With domestic giants like Baidu, Xiaomi, and Tmall Genie making substantial investments in refining their smart speaker ecosystems, the capabilities of models exemplified by OpenAI's GPT-4 are set to drastically enhance the user experience in smart applicationsThe enriched multimodal interactions of smart speakers are likely to evolve significantly, as manufacturers increasingly adapt to customized smart assistants’ developmentsWith an eye toward fulfilling diverse user needs, domestic chips are geared to create contextualized smart assistants, effectively transforming everyday interactions.

As for smart TVs, these devices lie on the brink of an AI-driven transformation, necessitating more powerful CPUs, dedicated AI cores, and enhanced audio-video interfaces while also focusing on lowering power consumption

Understanding the environment through centralized data gathering on air quality, lighting, and user dynamics will lead to the evolution of smart living spaces with an anticipated shift in human-device interactions towards personalization.

In this new era, edge AI is rapidly gaining tractionThe rise of RISC-V architecture has sparked an open-source hardware and design revolution, cultivating innovation in hardware capabilitiesMeanwhile, the HarmonyOS system promotes a "cross-device, distributed" approach that facilitates seamless device connectivity and collaboration without cloud dependencyUsers can leverage Harmony hardware to form clusters for high-computation tasks, drastically altering the landscape of edge computing needs.

In a world where cloud computing and IoT converge, the AI chips driving cloud and edge compute servers exemplify the versatility that GPUs provideTerminal AI chips are increasingly designed with integrated AI functions nesting within SoCs that combine CPU, GPU, and other necessary modules for specific tasks including speech and facial recognitionBalancing performance with power consumption is crucial as the landscape of IoT continues to flourish with innumerable devices seeking intelligent solutions.

Projected market value for global edge AI chips was shy of $40 billion in 2022, with expectations for exceeding $60 billion by 2025. China's domestic market, likewise poised for expansion, forecasts growth from $5 billion in 2022 to $11 billion by 2025, boasting an impressive annual growth rate of 30%. An estimated 1.31 billion edge AI chips will ship worldwide in 2023 alone, with the numbers expected to rise, marking a pivotal chapter in the evolution of intelligent connectivity.

In a milieu dominated by Internet connectivity and diverse consumer demands, large models and generative AI are reshaping the landscape of content and services

Advertisements

Advertisements