[Asia Economy Reporter Hyungsoo Park] Open Edge Technology is showing strong performance. The surge in demand for AI semiconductors is expected due to the craze over the artificial intelligence (AI) chatbot ‘ChatGPT,’ which appears to be influencing the stock price. Open Edge Technology provides IP and solutions necessary for AI semiconductor design. It primarily develops IP related to technologies that increase the speed at which system semiconductors process data received from external sources and supplies them in advance to foundries, fabless companies, and design houses. The business model is based on licensing or royalties. It is an IP partner of Samsung Foundry and also has customers using TSMC. It plans to officially register as an IP partner with TSMC this year.
At 10:29 a.m. on the 6th, Open Edge Technology was trading at 18,110 KRW, up 6.84% from the previous trading day.
According to market research firm Gartner, the AI semiconductor market, which was valued at $22 billion (approximately 27 trillion KRW) in 2020, is expected to grow more than 2.5 times to $55.3 billion (about 69 trillion KRW) this year. It is projected to reach $86.1 billion (approximately 107 trillion KRW) by 2026. The semiconductors mainly used in the AI field are graphics processing units (GPUs) that perform ‘parallel processing’ to handle large amounts of data at once. Nvidia holds more than 80% of the GPU market. GPUs are equipped with a large number of DRAMs, including high-bandwidth memory (HBM). The need for AI semiconductors, which embed computing units within memory semiconductors, is also increasing.
Leading domestic semiconductor companies Samsung Electronics and SK Hynix are accelerating the development of AI semiconductors. AI semiconductors have the advantage of faster speeds and lower energy consumption because AI computations can be performed directly inside the memory.
The government is also introducing support plans for AI semiconductor development. The Ministry of Science and ICT announced the ‘K-Cloud Promotion Plan Utilizing Domestic AI Semiconductors’ to introduce AI semiconductors into the cloud industry to expand initial demand for AI semiconductors. This year, it plans to advance domestic neural processing units (NPUs) and apply them to data centers. By 2030, a total of 826.2 billion KRW will be invested in AI semiconductor research and development (R&D). The Ministry of Science and ICT is promoting projects for developing next-generation intelligent semiconductor technologies and core technologies for PIM (Processing In Memory) AI semiconductors.
Open Edge Technology is undertaking government projects such as ▲developing HBM3-level or higher interface technology for high-performance AI servers ▲developing neuromorphic semiconductor (NPU) IP for mobile AI implementation ▲developing edge SoCs and middleware for semantic information processing in acquired images, including AI accelerator (NPU) development tasks.
Open Edge Technology has also secured GDDR6 technology, a high-speed memory operating at 18Gbps widely used in GPUs but increasingly used in high-performance AI semiconductors as AI workloads become more common. It is currently conducting research and development on HBM3, which offers more than 10 times the bandwidth and memory capacity compared to GDDR6.
Minjung Kwak, a researcher at Hyundai Motor Securities, said, "Open Edge Technology is the only company that supplies semiconductor manufacturing-specialized IP as a turnkey solution for AI edge computing environments," adding, "It provides platform IP that integrates highly efficient neural processing units (NPUs), which were previously fragmented, with memory system IP optimized for them."
She continued, "It has advantages in securing high efficiency in power consumption, area, and memory compared to competitors," and added, "Its main customers are domestic and international fabless companies and design houses."
Furthermore, she analyzed, "The final end users are approximately 60% S-type and 40% T-type," and explained, "NPUs, called IP specialized for AI edge computing, are semiconductors that specialize in AI computations inside smartphones or electric vehicles."
Researcher Kwak emphasized, "It is physically impossible for domestic and international fabless companies such as PurioAI, Rebellion, Boss Semiconductor, and those in China to independently develop the numerous functions embedded within an SoC," adding, "Therefore, support from IP companies like Open Edge Technology is essential."
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