Hello and welcome to Protocol Enterprise! Today: why the US Department of Commerce is imposing export restrictions on software needed to design next-generation AI chips, how Airtable is trying to turn itself into an enterprise software provider, and how AMD posts another spectacular quarter at Intel’s expense.
Design error
In an effort to slow down China’s ability to make advanced microchips, the US is about to introduce an export ban on a specific piece of design software vital to producing the most advanced chips needed for AI applications, Protocol has learned.
- After months of pondering a potential ban, the White House has elected to order the Department of Commerce to restrict sales of electronic design automation software needed to take advantage of an emerging manufacturing technology.
- This advanced technology, called gate all around, is needed to produce chips that have more computing power and at the same time consume less energy.
- The export ban is likely to come soon: in the coming days or weeks, depending on the final details, which are still being worked out.
- The White House and the Department of Commerce have not returned a request for comment.
Export restrictions on chip-making tools are nothing new. The US has already convinced the Netherlands to ban ASML from selling its advanced extreme ultraviolet lithography systems to China.
- EUV systems are needed to print the most advanced chips and are produced exclusively by ASML.
- According to William Reinsch, a former secretary of commerce, the US has long preferred to block China’s access to the tools it needs to create advanced technology, while allowing the sale of the products themselves.
- Last week, two toolmakers – KLA and Lam Research – announced that the Department of Commerce had issued a notification that it would block the sale of equipment used for manufacturing 14 nanometers and below.
- It’s not clear how much it will cost, like Cadence and Synopsys, who make the widely used chip design software. Both have built healthy businesses around the software they are currently allowed to sell.
Tensions between the US and China are high. House Speaker Nancy Pelosi arrived in Taiwan on Tuesday for an official visit designed to reiterate the US’s “unwavering commitment” to support the island country.
- Relations between the US and China are so tense that TSMC chairman Mark Liu made a rare media appearance on CNN to discuss Taiwan’s fears.
- “No one can control TSMC by force,” he said. “If you use military force or an invasion, you recreate the factor of TSMC”[ies] not operable because this is such an advanced production facility. It depends on the real-time connection to the outside world: to Europe, to Japan, to the US. From materials, to chemicals, to spare parts, to engineering software, diagnostics, and it’s everyone’s effort to get this plant up and running.”
— Max A. Cherney (e-mail | twitter)
SPONSORED CONTENT FROM ALIBABA
How global e-commerce benefits US workers and the US economy: Alibaba – a leading global e-commerce company – is a particularly powerful engine to help US companies of all sizes sell goods to more than 1 billion consumers in its digital marketplaces in China. In 2020, US companies sold more than $54 billion to consumers in China through Alibaba’s online platforms.
Read more from Alibaba
Airtable… for apps?
Airtable’s “Steroid Spreadsheet” quickly became a crowd favorite among designers and developers looking for a new productivity and collaboration tool. But according to CEO Howie Liu, the company has bigger ambitions to become an enterprise application development software platform, which could take it to a new level.
As Aisha Counts reported, Liu believes Airtable’s database could serve as a foundation for application development tools, an insight he noted when he worked at Salesforce ten years ago. It’s already signed up a few clients for this emerging part of its business, but the company faces an uphill battle to convince IT buyers that it’s more than just a fancy spreadsheet.
— Tom Krazit (e-mail | twitter)
A big difference
AMD told a very different story on Tuesday than its bigger rival last week, when it released its latest quarterly financial report.
For the first time, AMD began to break down data center sales as a separate category, which used to be bundled with the company’s video game chip revenues, among other things. AMD reported that data center revenue rose 83% to $1.5 billion, which CEO Lisa Su said was largely a product of server processor sales.
But sales of big data center chips weren’t enough to saturate Wall Street: Shares fell nearly 6% during the extended session Tuesday, following a slightly weaker-than-expected outlook for the next quarter.
AMD’s server segment has seen significant gains in recent years. Intel, on the other hand, has stumbled. Last week, Intel reported data center and AI sales of $4.6 billion, down 16% from the same period a year ago.
In the earnings conference call, executives reiterated the company’s bright outlook for the year, saying AMD was on track to grow total revenue by 60% to approximately $26.3 billion. The CEO said the company expects to achieve its goal despite the “current macroeconomic environment”.
— Max A. Cherney (e-mail | twitter)
Around the company
IBM’s board of directors will investigate claims that its vendors inappropriate reclassified mainframe deals as “cloud” or other newer software deals, which shareholders believe were hiding the true performance of IBM’s newer companies.
There is a downside to the Chips Act: Companies like Intel that had already invested in advanced chip manufacturing operations in China should not add additional capacity there if they want their money, Bloomberg said.
SPONSORED CONTENT FROM ALIBABA
How global e-commerce benefits US workers and the US economy: Using economic multipliers published by the U.S. Bureau of Economic Analysis, NDP estimates that the ripple effect of this Alibaba-fueled consumption supported more than 256,000 U.S. jobs and $21 billion in wages in 2020. These US sales to Chinese consumers also contributed $39 billion to US GDP.
Read more from Alibaba
Thanks for reading – see you tomorrow!
.