Advantest Benefits from ChatGPT Hype and High Demand for Chips and Gear
Advantest Corp, a Tokyo-based company that manufactures chip-testing devices, has witnessed a surge in demand for its products, thanks to the hype around OpenAI's ChatGPT and other innovative applications of artificial intelligence. The company's Co-Chief Strategy Officer, Yasuo Mihashi, suggests that the global race to develop powerful computing clusters and next-gen AI training systems is driving chipmakers to purchase more of Advantest's testing tools.
While the demand for consumer electronics remains muted, the AI surge is boosting sales from key players like Nvidia Corp. and Advanced Micro Devices Inc. These companies are primary suppliers of AI-training semiconductors, and Advantest is their main testing tool supplier. Microsoft Corp. and Alphabet Inc.'s Google have already integrated generative AI into their web tools, and in China, a parallel race led by companies like Alibaba Group Holding Ltd., SenseTime Group Inc., and Baidu Inc. are trying to build a dominant AI platform.
The advent of AI platforms is pushing the limit of chip miniaturization and advanced packaging, leading to increased defects during the manufacturing process. This raises the need for more testing tools to guarantee the performance and quality of the chips. As countries all over the world invest in AI and autonomous driving, the demand for data center GPUs and testers is expected to grow fast, even without China.
Chips used for servers are getting bigger and more sophisticated, requiring more time for testing. There's no magic way to shorten testing time, so chipmakers need to buy more testing tools to test more chips simultaneously. The analysts predict that global revenue for high-performance GPU chip testers will likely surpass that of smartphone chip testers in a few years.
Advantest shares have surged 36% this year, approaching all-time highs, as the world's imagination has been captured by the promise of ChatGPT and other offerings that make internet services smarter and more human-like. Despite China's export restrictions on Japanese chips technology, Advantest remains optimistic since its gear is not tied to a specific fabrication process.
