Kneron, a semiconductor startup based in the United States, recently announced that it has successfully raised an additional $49 million in funding. With a total round of funding reaching a staggering $97 million, the company aims to accelerate the commercialization of its artificial intelligence (AI) chips. Kneron’s ambition is to create AI chips that can rival the industry giant Nvidia. This latest funding round attracted notable investors, including Taiwanese conglomerate Foxconn, known for assembling Apple’s iPhones, and communications tech company Alltek.
The skyrocketing interest in artificial intelligence and the underlying chip technology has become undeniable. This is further highlighted by Nvidia’s remarkable 180% rally in stock performance this year, as well as the successful IPO of semiconductor designer Arm in the United States. While Nvidia focuses on manufacturing graphics processing units (GPUs) that excel in running AI systems in servers and data centers, Kneron aims to introduce AI chips that enable AI processing on the “edge” devices, such as consumer electronics and autonomous vehicles.
Running AI applications directly on the device instead of relying on the cloud offers various advantages, including enhanced security and quicker response times. Kneron’s semiconductors, called neural processing units (NPUs), are designed to bring AI capabilities directly into edge devices. One of their most recent products, the KL730, is specifically tailored for autonomous driving applications. Albert Liu, CEO of Kneron, notes that the high operating costs associated with GPUs could drive demand for their more cost-effective NPUs.
Kneron faces fierce competition from established players like Qualcomm and MediaTek, who are also vying to dominate the on-device AI chip market. Additionally, numerous startups are working towards developing their own AI semiconductors. Despite the heavy competition, Kneron has managed to secure support from influential backers. Notably, Foxconn’s involvement stands out, as the company strives to diversify its operations beyond electronics assembly by exploring areas such as electric cars and semiconductors. As part of their partnership, Foxconn and Kneron are committed to advancing AI deployment in various sectors, including automotive. Their joint efforts will focus on creating an ultra-lightweight AI chip capable of operating generative pre-trained models from the cloud.
While Kneron is making significant strides in the AI chip market, certain challenges remain. Foxconn’s previous struggles in the semiconductor industry, as evidenced by its withdrawal from a joint venture in India, highlight the difficulties of penetrating the microchip market. Furthermore, geopolitical tensions between the United States and China pose risks for Kneron and its chip manufacturing partner, TSMC. With concerns of a potential Chinese invasion of Taiwan, where TSMC is headquartered, the global supply chain for semiconductors could face disruptions. To mitigate these risks, Kneron plans to establish a more geographically distributed production footprint in the United States starting next year.
Kneron’s successful funding round and its emerging presence in the AI chip market underscore the growing significance of edge AI processing. With its NPUs designed to be more cost-effective and its focus on AI applications for autonomous driving, Kneron has positioned itself as a formidable competitor against industry giants like Nvidia. Supported by influential investors such as Foxconn, the company is well-equipped to tackle the challenges ahead and contribute to the advancement of AI technology in various sectors. However, as geopolitical tensions persist and competition intensifies, Kneron will need to navigate these obstacles effectively to secure its position as a key player in the AI chip market.
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