Artificial-intelligence hardware: New opportunities for semiconductor companies

Software has been the star of high tech over the past few decades, and it's easy to understand why. With PCs and mobile phones, the game-changing innovations that defined this era, the architecture and software layers of the technology stack enabled several important advances. In this environment, semiconductor companies were in a difficult position. Although their innovations in chip design and fabrication enabled next-generation devices, they received only a small share of the value coming from the technology stack--about 20 to 30 percent with PCs and 10 to 20 percent with mobile. But the story for semiconductor companies could be different with the growth of artificial intelligence (AI)--typically defined as the ability of a machine to perform cognitive functions associated with human minds, such as perceiving, reasoning, and learning. Many AI applications have already gained a wide following, including virtual assistants that manage our homes and facial-recognition programs that track criminals. What will this development mean for semiconductor sales and revenues?