Why all semiconductor firms are not benefiting from the AI boom like Nvidia has

Not all chip firms are benefiting from the boom in artificial intelligence, earnings show, underscoring the complexities of the semiconductor supply chain and dominance of some companies over others in different parts of the sector.

A slew of semiconductor companies have reported financial results for the June quarter, with some smashing expectations and others disappointing, providing a glimpse into how excitement over AI is affecting their earnings.

Current interest in artificial intelligence revolves around two key terms — large language models (LLMs) and generative AI. LLMs require huge amounts of computing resources and data to train and they underpin generative AI applications like chatbots from Google and OpenAI.

Tech giants training the LLMs are not cutting back on spending. Meta said on Wednesday it expects "significant" growth in capital expenditure in 2025 "to support our AI research and our product development efforts." Microsoft said this week its capital expenditure rose nearly 80% year-on-year to $19 billion in the June quarter.

This spending by tech giants, as they continue to add computing resources, has been a huge boost for Nvidia because the company's graphics processing units (GPUs) are used to train these LLMs.

But Nvidia's rival AMD has brought its own chip to market, called the MI300X AI chip, for AI purposes and is beginning to see the rewards. AMD said on Tuesday that it expects data center GPU revenue to exceed $4.5 billion in 2024, up from the $4 billion the company forecast in April. The chip company reported earnings and revenue for the second quarter that beat market expectations.

Chip manufacturing and tool companies appear to be benefiting too from the boom in AI. TSMC, the world's largest