The AI-Powered PC Revolution: Arm Chips to Transform the Semiconductor Industry
The global semiconductor industry is poised for a profound “transformation” driven by the rise of artificial intelligence (AI)-powered PCs, according to a groundbreaking report by Morgan Stanley. This shift stems from the growing demand for more powerful computers capable of handling increasingly sophisticated AI applications.
Arm Chips: Efficiency and Performance for AI
Morgan Stanley analysts have identified Arm-based central processing units (CPUs) as key players in this transformation. Arm chips are renowned for their exceptional energy conservation and thermal control. These attributes translate into longer battery life and more compact designs, making them ideally suited for portable PCs designed for AI applications.
According to the report, Arm-based AI PCs are expected to “start a transformation that will affect the global semis industry.” This shift is fueled by the increasing popularity of AI-powered applications, such as Microsoft’s Copilot, which requires a computing capability of 45 tera operations per second (TOPS) to run smoothly on a laptop.
Market Share Outlook
Currently, traditional Windows PCs rely on processors from companies such as Intel, AMD, and Qualcomm. However, Morgan Stanley projects a significant shift towards Arm-based CPUs, with a penetration rate of 95% by 2027, up from just 8% in 2024. This growth in the adoption of AI PCs is expected to drive demand for semiconductors, particularly Arm-based chips.
Beneficiaries of AI PC Boom
Several companies stand to benefit from the surge in Arm-based AI PCs, including:
- TSMC: Morgan Stanley predicts an increase in TSMC’s foundry market share as it handles more CPU production for AMD and Intel.
- MediaTek: The bank anticipates that MediaTek will capture a 50% market share in Windows on Arm (WOA) PCs in 2028.
- Nvidia: The partnership between Nvidia and MediaTek is seen as a potential game-changer in the WOA PC market.
- Qualcomm: The mobile chipmaker is expected to play a significant role in the development of Arm-based AI PCs.
- Microsoft: The software giant is driving the demand for more powerful AI PCs with its AI tools and applications.
- Arm: As the designer of Arm chips, the company is positioned to reap the benefits of the growth in AI PC adoption.
Conclusion: A New Era of Computing
The advent of AI-powered PCs is ushering in a new era of computing. Arm-based chips, with their superior energy efficiency and performance, are poised to play a central role in this transformation. While the traditional PC market, centered on x86-based CPUs, is expected to remain relevant, the rise of Arm-based AI PCs is set to reshape the global semiconductor industry in the coming years.
Data sourced from: cnbc.com
