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Explore the latest trends and actionable insights on the Semiconductor market to inform business strategy and pinpoint opportunities and risks

Chipmakers Venture into the DPU Market: 2022

Industry: Semiconductors
Current: Other Industry Indicators

Major chipmakers have either announced or acquired DPU-based (data processing unit) startups in 2022
AMD acquired data center optimization startup Pensando for $1.9 billion
Similarly, Nvidia has acquired block storage startup Excelero in March 2022

Chipmakers Venture into the DPU Market: 2022

The chip-making industry for long has been dominated by big manufacturers such as Intel, Nvidia and AMD. These companies have manufactured chips for generic applications in the technology industry. The customers have been constrained to use these high-performing chips that would function according to their needs and get the most out of these semiconductors.

But traditional software-focused companies with financial muscle are now venturing into chip-making to optimize design and performance for their own software solutions. The recent COVID-induced chip shortage, the other decisive factor, forced these business customers to look for solutions that complement their digital tools and ensure a steady supply of semiconductors. The semiconductor industry adhered to Moore’s Law, which has been the fundamental basis for the chip-making industry since 1975 but has now lost its relevance in recent years, with performance in the chip-making industry presently being gauged based on processing speed, reduction in power consumption and reduction in heat generation as opposed to the number of transistors on an integrated circuit as proposed by Moore’s Law. Following these developments, many tech giants focus on manufacturing these chips in-house.

The growth in cloud computing, AI-based cloud services, the expanding networks of data centers, emerging data processing markets, and growing competition from tech giants led these leaders in chip-making to maintain their competitive edge in the market and invest in software and cloud-based companies.

AMD acquires cloud startup Pensando

Advanced Micro Devices (AMD) acquired data processing unit (DPU) vendor Pensando for $1.9 billion. The acquisition enables AMD to compete with companies in the emerging yet competitive data center market. Pensando makes an integrated platform consisting of a software platform backed by programmable processors, which effectively provides cloud computing data centers to customers. The deal is expected to close in the second quarter of 2022 and is subject to regulatory approvals and closing conditions.

Intel to acquire Granulate

Intel has agreed to acquire Israel-based startup Granulate for $650 million. Granulate is an AI-based developer of real-time continuous optimization software. The acquisition will help optimize and scale up Intel’s cloud and data center segment. The acquisition is expected to close in the second quarter of 2022, subject to typical closing conditions.

Nvidia acquires storage specialist Excelero

Nvidia has acquired an Israel-based startup Excelero, which specializes in high-performance software-defined storage for cloud and enterprise applications. The acquisition will enable Nvidia to accelerate growth in its block storage and networking. Block storage is an essential component of the DOCA (Data Center-on-a-Chip Architecture) framework used in the data processing units (DPUs).

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