The financial reports released so far reveal that not all chip companies can benefit from the prosperity of artificial intelligence (AI), highlighting the complexity of the semiconductor supply chain, as well as the dominant positions of some companies in different fields of the industry.

Currently, many semiconductor companies have released their performance reports for the second quarter. The performance of some companies exceeded expectations, while that of others was disappointing, reflecting the impact of the rise of artificial intelligence on their profits.

Interest in artificial intelligence revolves around two key terms: large language models (LLM) and generative artificial intelligence (AIGC). LLM requires a large amount of computing resources and data to train, and they support generative artificial intelligence applications such as Google and OpenAI chatbots.

Technology giants training LLMs are still firmly committed to burning money. Meta said on Wednesday that it expects capital spending to "substantially" increase by 2025 to support our AI research and product development.$Microsoft (MSFT.US)$This week, capital expenditures for the second quarter increased by nearly 80% YoY to $19 billion.

As technology giants continue to increase computing resources, these expenditures are a huge driving force for$NVIDIA (NVDA.US)$because its graphic processing units (GPUs) are the preferred choice for training these LLMs.

Nvidia's competitor AMD has launched its AI chip MI300X on the market and is beginning to see returns. AMD said on Tuesday that it expects data center GPU revenue to exceed $4.5 billion by 2024, higher than the $4 billion it forecasted in April. The chip company's second-quarter earnings and revenue exceeded market expectations.

Chip manufacturers and semiconductor equipment companies also appear to benefit from the boom in AI. The world's largest semiconductor manufacturer$Taiwan Semiconductor (TSM.US)$said last month that its net income for the second quarter increased by more than 36% YoY, while the operating profit of Korean storage chip giant Samsung Electronics Q2 increased by a staggering 1,458.2% YoY.

Meanwhile, the Dutch company that produces the most advanced chips in the world's lithography machines said last month that net bookings for Q2 increased by 24% YoY, highlighting the continued high demand for global semiconductor manufacturers such as Taiwan Semiconductor.$ASML Holding (ASML.US)$After releasing disappointing financial guidance, their stock prices fell on Wednesday. Despite both companies emphasizing the importance of their application of AI, the reality is that their intersection with AI technology is still very limited.

Not catching the wind of AI.

It is worth noting that not all semiconductor companies have been boosted by the growth in artificial intelligence investment due to their relatively small importance in the early stages of AI.

$Qualcomm (QCOM.US)$And.$Arm Holdings (ARM.US)$

In fact, many companies' chips are based on Arm-designed blueprints, and most smartphones in the world also use Arm technology semiconductors. However, although many electronics manufacturers are talking about AI smartphones, this has not fundamentally brought higher growth to this chip design company.

Most of Arm's revenue still comes from consumer electronics, not data center businesses that help AMD and Nvidia achieve rapid growth. Some analysts believe that as more and more devices adopt artificial intelligence technology, Arm may benefit.

In addition, Qualcomm's chips are mainly used in Samsung and other smartphones, and the company's most of the revenue still comes from smartphones. Similar to Arm, Qualcomm's chips are not used in data centers required for LLM training.

However, the company's chips will be used in Microsoft's upcoming AI personal computer, so AI is a long-term game for Qualcomm.

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