Artificial Intelligence - The next big growth driver for ... · PwC Strategy& –Expertise in ... PwC Strategy& Analysis 4.0 5.0 6.0. PwC Strategy& The AI stack consist of multiple

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Prepared for ISS Europe 2018

Artificial Intelligence –

The next big growth driver for the semiconductor industry

Tanjeff Schadt, PwC Strategy&

March 6, 2018

PwC Strategy&

Welcome

Prepared for ISS Europe 2018 2

March 6, 2018

Tanjeff SchadtPrincipal

Munich, Germany

Biography:

• 8 years of industry experience in management

functions (R&D, product portfolio, strategy)

• 6 years of strategy consulting experience in

Semicon, Electronics and Automotive industry

• Active member of PwC’s semicon and technology

strategy practices

• Lead various projects at semicon clients, esp.

with focus on innovation, R&D and operational

excellence

PwC Strategy&

PwC’s semiconductor industry consulting experience spans the entire ecosystem and is unparalleled among consultancies


PwC Strategy& – Expertise in semiconductor industry

March 6, 2018

• 40+ major semiconductor industry projects in the past two years alone

• Deep, global bench of >50 global consultants, with experience in all aspects of the semiconductor industry

• Extensive knowledge base of industry-specific best practices

Our Semiconductor

Sector Consulting

Expertise

Broad suite of offerings

Value streams

Marketing & sales

Supply chain

Product innovation & development

Strategy

Technology consulting

Capital project and infrastructure (PMC)

Project experience along the entire value chain

/upload.wikimedia.org/wikipedia/commons/2/24/Samsung_Logo.svg

PwC Strategy&

We see that eight essential technology streams have emerged –Artificial Intelligence (AI) is one of them


The Essential Eight Technologies

March 6, 2018

• PwC is continuously tracking more than

150 technologies

• The most impactful technologies

emerged as the essential eight

• Each technology stream at PwC is

represented with dedicated teams building

a well-grounded foundation of

knowledge

• Artificial Intelligence is among our

essential eight technologies

Internet of Things

Augmented

Reality

Virtual

Reality

Blockchain

Artificial Intelligence

3D Printing

Drones

Robots

PwC

Essential

Eight

PwC Strategy&

The global semiconductor market will continue to grow –AI is a major growth driver in the upcoming decade


Global Semiconductor Market [$ bn]

Source: IC Insights (Global semiconductor market), JP Morgan (AI silicon market – foundry revenues, not exhaustive)March 6, 2018

In the next decade we expect

AI share growing to > $ 100 bn

Total global semicon revenue w/o AI

Total global semicon revenue

+?

...

405

450

495

540

2017 2018 2019 2020 2021

CAGR 3.7%

CAGR 4.8%

Total market:

$ 530 bn

AI share:

$ 26 bn

PwC Strategy&

Market Overview AI Classification

Sample Use Cases

2021 Market Forecast ($ bn)

Training System

Inference System

Edge devices for consumer electronics

• Deep-learning wireless camera• Augmented human decisioning

Automotive • ADAS• Driver safety systems

Financial Services• Authentication• Portfolio Management

Healthcare• Disease Prevention• Diagnosis

Tech, Media, and Telecom• Network Security• Personal Assistants

Retail• Customer Insights• Pricing Analytics

Industrial• Manufacturing Automation• Proactive Failure Detection

Smart Buildings• Monitoring & Security• Energy Efficiency

Most attractive growth opportunities for AI are Automotive and Financial Services – however, edge devices offer a huge untapped potential


Artificial Intelligence Semiconductor – Market Overview

Cloud EdgeMarch 6, 2018

SELECTION

2.01.0 3.0

Source: IDC, Allied Marker Research, PwC Strategy& Analysis

4.0 5.0 6.0

PwC Strategy&

The AI stack consist of multiple building blocks – innovation is brought across the stack to various target applications and use-cases


The Artificial Intelligence Stack

March 6, 2018

Stack Element Description Examples of Solutions and Vendors

Applications & Services

Software applications leveraging AI for “intelligence”

AI PlatformsReady-to-use building blocks and services thatprovide a host of AI capabilities (often proprietary

AI Frameworks, Tools and Interfaces

Tools and frameworks to leverage underlyingML algorithms to design, build, and train deep learning models for specific applications

AI LibrariesA set of low-level software functions that help optimize the deployment of an AI framework on a specific target silicon

AI Hardware(Accelerator vs. Edge Processing)

Processor units and semiconductor logic circuits for accelerated execution of AI workloads / computations as well as adaptable AI processing on the edge

Alexa

Watson

cuDNN

Tensor RT

MKL

DL SDK

Vision SDK

ARM NNSnapdragon

NPE SDK

TelsaNervana NNP ARM MLSnapdragon

NPE

Tools to optimize

deployment to

hardware architecture

AI-optimized silicon

architectures

Current

battleground:

where will AI be

processed?

Loihi

ILLUSTRATIVE

PwC Strategy&

Most chip vendors are providing AI-specific acceleration to enhance their existing product portfolios …


Artificial Intelligence Stack – Current Status (1/2)

March 6, 2018

Target Appli-cations

DatacenterSelf-driving cars

AR/VRDrones

Surveillance

DatacenterSelf-driving carsRetail Analytics

Smart CitiesSurveillance

Computer vision

ADASDrones

DatacenterMedical

Vision Processing for

ADAS

Computer VisionSmart Driving

Voice assistantsConsumer

robotsSmartphones

AutomotiveSurveillance

DroneMobile /

Wearable

AL Libraries

MKLDL SDK

Vision SDKMyriad Dev Kit

cuDNNTensor RT

Snapdragon NPE SDK

reVISIONSDAccelToolkit

S32 Design Studio IDEVision SDK

STM32STM32 Cube

ARM NNTensilica NN

mapper toolkitDSP SDK

AI Pro-cessingHW / Silicon

CPU Xeon PHICortex-A75 Cortex–A55

DSPHexagon 685 DSP (Snap-

dragon NPE)

TensilicaVision C5 DSP

GPUPascal, Volta

Maxwell, Tesla

FPGA Arria 10Zynq

MPSoC

CustomNervana NNP

Myriad XLoihi NMP

ASIC – TPUS32V Vision Processor

AI SoC for DCNN

ARM ML

Chipmakers IP Licensors

EXTRACT

PwC Strategy&

… however, they face an unexpected threat from hyperscalers and product companies, who are gravitating towards customized chips for AI processing


Artificial Intelligence Stack – Current Status (2/2)

March 6, 2018

Target Appli-cations

Facial recognitionText-to-speechSmart Assistant

Digital Transformation

Intelligent Assistant

Image searchVoice search

TranslateSmart Reply

SearchVoice AssistantComputer Vision

Facial recognitionAnimated emoji

Self-driving carsFace IDAnimoji

AL Libraries

AWS DL AMIXilinx SDAccel

Bing APIFace API

Analytics API

Video APIVision API

Speech APINL API

Core ML

AI Pro-cessingHW / Silicon

CPU

DSP

GPU

FPGA

CustomAI chip for Edge

(Alexa)AI chip for Hololens

Cloud TPUTPU

Neural Engine (Exynos 9)

Neural Engine (A11 Bionic)

Cloud Player Others (Product Companies)

GPUs GPUs

AWS EC2 F1Project

Brainwave Cloud Server

In-car chip

GPUs

EXTRACT

PwC Strategy&

Four main forces will shape the AI opportunity for semiconductor players in the coming years


Main Forces shaping AI Opportunities

March 6, 2018

Ever broader

accessibility of AI

• Development of applications is

increasingly supported by

platforms, frameworks, libraries,

sensors

• Entry costs become increasingly

lower, but so is ability to

differentiate for application makers

• AI is an open battleground

• AI features: a must in many

devices / applications

• Differentiation for application

makers becomes complex, not

pure AI-driven

Domain-specific

architectures

• Semiconductor node scaling very

expensive, and increasingly so

• Fabs offer standard IP

• Proliferation of IoT outside of PC

and datacenter

• Winning horizontal solutions

very expensive to develop

• Pockets of value in

increasingly fragmented

industry applications

Proliferation of AI

at the edge

• Growth in edge devices and

applications

• Related pull in sensors

• Growth in intelligent device

testing and management

• AI becomes increasingly feasible

in small form factors

• Cost of data transmission to the

cloud

• Latency becomes critical

• Data privacy concerns

Evolution of AI

algorithms &

technologies

• The capability to understand AI

evolution and implications

holistically is critical

• Current AI technologies are far

away from enabling general

intelligence

• Ability to test and validate AI

behavior is a big question mark

• Evolution in AI algorithms will

continue, raising the need to adapt

silicon

PwC Strategy&

Semiconductor players should define their distinct way to play in AI


Pure-Play Archetypes

March 6, 2018

Outsourcedsolutiondesigner

Horizontalsolution leader

Industry applicationleader

Examples

Core

differentiating

capabilities

• Customized silicon, based on standard or proprietary IP

• Application-specific integration and testing tools

• Possibly proprietary software and algorithms

• Standard silicon for the largest cross-industry application segments e.g. data center

• Broadly applicable software tools• Focus on interoperability and

compatibility

• Design and fabrication services• Integration of customer

requirements or standard IP, as required

• Multi-purpose packaging, assembly and testing services

Product

portfolio

• Deep customer intimacy• In-depth AI application stack

understanding• Solution integration & selling• Application-specific customer

support

• Ecosystem, partnership and alliance management

• Breakthrough innovation in R&D and fabrication

• Channel management

• Customer requirements understanding & relationship management at scale

• Customer segmentation and selection

• External R&D integration

SELECTION

PwC Strategy&

Start-up Founded HQ (GEO) Stage Funding to Date ($ m) Strategic Investors Technology

Cambricon Technologies n/a China Series A Alibaba Deep learning processor

CyberSwarm n/a San Mateo, CA Seed None AI-assisted cybersecurity CPU

Graphcore n/a UK Series C Samsung, Dell Deep learning processor

Horizon Robotics 2015 Beijing, China Series A Intel Vision DSP

KnuEdge n/a San Diego, CA n/a None Neuromorphic processor

LightOn 2016 Paris, France Seed n/a Optical/quantum AI computing

Movidius n/a San Mateo, CA Series E Intel Neural Compute Engine Accelerator (Appl: Vision DSP)

Mythic n/a Redwood City, CA Series A n/a Neuromorphic processor

Nervana n/a San Diego, CA Series A Intel Deep learning processor

Reduced Energy Microsystems 2014 San Francisco, CA n/a n/a Deep learning processor

Rigetti Computing 2013 Berkeley, CA Series B n/a Optical/quantum AI computing

Tenstorrent 2016 Toronto, Canada Seed None Deep learning processor

Vayyar 2011 Yehud, Israel Series C n/a Vision DSP

Vicarious 2010 San Francisco, CA Series C Samsung Neuromorphic processor

Wave Computing 2010 Campbell, CA Series D Samsung Deep learning processor

Xanadu 2016 Toronto, Canada Seed n/a Optical/quantum AI computing

Cerebras 2016 Los Altos, CA Series B n/a Deep learning processor

ThinkCI n/a n/a n/a n/a n/a

Knowm 2015 Santa Fe, NM n/a n/a Neuro-memristive processors (Thermodynamic RAM)

ThinkForce 2017 Shanghai, China n/a No AI Acceleration Engine

Groq 2016 Palo Alto, CA n/a No n/a

Gyrfalcon n/a n/a n/a n/a n/a

In recent years the AI start-up landscape gained momentum –funding of semicon start-ups is back again


Semiconductor AI Start-up Landscape EXTRACT

100

110

101

1

25

70

0

2

9

47

56

0

117

0

137

112

3

0

0

80

0

0

Source: Strategy& research, CrunchbaseMarch 6, 2018

PwC Strategy&

* Based on Google estimates (2016) – estimate of 50 TOPS at floating point 16 bit precision, i.e. approx. 25 TOPS at floating point 32 bit precision

** Illustrative based on current Intel press releases. Exact performance and power consumption not announced.

*** Representative example of Intel Xeon family

Source: Strategy& desktop research June 2017; some devices incorporate multiple dies, e.g. Google TPU 2.0

The silicon required for Level 5 autonomous driving is likely already available – power consumption and form factors still evolving


Evolution of relevant IC Alternatives for in-car AI Inference

GPUCPUSpecialized

GPU/VPU

Specialized AI processor /

Neuromorphic chipCircle size indicative of relative power consumption

2013 2014 2015 2016 2017 2020

1

2

4

8

16

32

64

128

256

Intel Xeon E5-2697 v4***

Intel Xeon Phi 7250

Google TPU 2.0

Nvidia Tesla V100

IBM TrueNorth

Nvidia Tesla K40

Nvidia Tesla P40Nvidia Tesla P100

MobilEye EyeQ3

MobilEye EyeQ4

MobilEye EyeQ5

**Intel Nervana

Lake Crest 2.0Tera-operations

per second (TOPS)

in 32 bit floating point precision (fp32)

Claimed to be

able to support

SAE L5 by 2020

~25 TOPS @ fp32

Approximate computing power required for

inner-city autonomous driving with current algorithms*

Inference only – AI training in the cloud

present

Intel Nervana

Lake Crest **

EXAMPLE: AUTONOMOUS DRIVING

March 6, 2018

PwC Strategy&

Innovation in AI compute is increasingly accessible to startups, who focus on novel chip architectures


The Start-up Scene in AI Silicon

Source: Strategy& research, Crunchbase * Startups which received funding in 2012-2017March 6, 2018

VC Funding in Semiconductor AI Start-ups

$ m (2012-2017)

640

212

50

2015-2016<2014 2017

3X

4x

Key Technologies of AI Semiconductor Start-ups*

(2012-2017)

8

4

3

3

1

Vision DSP

AI-assisted cybersecurity

Neuromorphic processor

Optical/quantum AI computing

Deep learning processor

PwC Strategy&

European semiconductor companies have the know-how and a right to win –

you better have a strategy!

AI is THE opportunity for European semicons


March 6, 2018

The opportunity

is big!

There are plenty of

growth options!

Don‘t forget the

ecosystem!

• What is your strategy for

Artificial Intelligence?

• We are in an early phase –

core is still an opportunity

• European semicons can

build core AI in Asia

• Edge is core capability of

European semicons

• What is your answer on how

to play in the ecosystem?

PwC Strategy&

Cooperate

Forget what you can

do on your own:

What can you achieve

together in the

European semicon

industry?

European semicon players shall take advantage of AI in cooperative mode


March 6, 2018

Way to play?

You better have a strategy!

Where to play?

AI is application driven –

what are the most relevant

applications for you?

How to play?

What is the right

spot in the AI

ecosystem? ?

PwC Strategy&PwC Strategy&

Outlook: Global Semiconductor Report 2018 coming soon


March 6, 2018

• The PwC Semiconductor Report Series provides an overview of market

developments, growth opportunities and success factors of the global

semiconductor market

• It includes a forecast on global semiconductor billings by component,

region and application

• The reports also covers highlight topics and their implications on the future

of the industry – past topics included the Internet of Things (2015) and a

spotlight on Automotive (2013)

• The two highlight topics in 2018 will be:

• Artificial intelligence – the next big growth driver

• Digitization of semiconductor companies

PwC Semiconductor Report Series



March 6, 2018

www.strategyand.pwc.com/strategythatworks


Contact


March 6, 2018

Tanjeff SchadtPrincipal

Semicon expert

Phone: +49 89 545 255 21

Mobile: +49 15 167 330 436

Email: [email protected]

PwC Strategy& (Germany) GmbH

Bernhard-Wicki-Straße 8

80636 München

www.strategyand.pwc.com/de

mailto:[email protected]

PwC Strategy&

Thank you!

Prepared for ISS Europe 2018

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March 6, 2018

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Artificial Intelligence - The next big growth driver for ... · PwC Strategy& –Expertise in ... PwC Strategy& Analysis 4.0 5.0 6.0. PwC Strategy& The AI stack consist of multiple