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"Additionally, what puzzled me the most about the R1 paper was that, unlike in V3, it made no mention whatsoever of how much computing resources were consumed. They surely wouldn’t suddenly overlook something this significant. This omission is clearly intentional, and it might be that they either do not want to show it or, for some reason, are unable to reveal it. In fact, it is highly likely that R1 utilized far more GPU resources than V3, because developing inference models requires “massive experimentation.” Therefore, if we were to hazard a guess as to why the computing usage is missing from the paper (even though we really shouldn’t), it suggests that they possess a considerable number of Nvidia GPUs.

Dario Amodei’s blog post from a few days ago is filled with many intriguing points, but what really struck me was when he said, “A significant portion of the chips that DeepSeek is believed to possess appear to be comprised of H20—which is predicted to be soon banned, H800—which was delivered before being banned, and H100—which is highly likely to have been smuggled.” For the record, since the H100 chip was subject to export bans from the time of its release, if they have used this chip, it means they acquired it through illegal channels."

Source: Mirae Asset Securities

So why is it presumed that AMD will fail to meet its stretch goals while ASICs will succeed? In our view, AMD has just as much potential to achieve its SAM as ASIC competitors, and this is perceived by buyers as a “show-me” story. So why has ASIC not yet become a “show-me” story? In our perspective, ASICs should also be expected to deliver; this does not mean that either technology offers a guaranteed solution, but rather that the challenges of competing with Nvidia should not be taken lightly.

It is difficult to say that the ASIC relationship provides suppliers with a more fixed market share, as nearly every ASIC we know of faces direct competition. For example, MediaTek (as reported by Charlie Chan) is expected to challenge Broadcom within the Google TPU ecosystem, and Alchip (also reported by Charlie Chan) is anticipated to challenge Marvell within the Amazon (as reported by Brian Nowak) Trainium ecosystem. Recent reports indicate that Meta (also reported by Brian Nowak) is considering the acquisition of a Korean ASIC design—suggesting that its relationship with Broadcom is not exclusive—and Meta is also investing significantly in AMD. Bytedance is Broadcom’s third ASIC customer, but there is also the possibility that they have alternative ASIC designs from Chinese vendors in the pipeline due to export control issues. In fact, export controls on AI-related shipments to China have lowered the technological threshold to 80% of the state‑of‑the‑art, creating a highly open competitive environment. OpenAI could become a major ASIC user, but reports indicate that they are already working with multiple suppliers.

Nevertheless, Broadcom and Marvell possess enviable capabilities in this field that will undoubtedly drive growth. Success begets success, yet there are clearly challenges within the ASIC domain as well.

We expect that in 2025, Nvidia and AMD will outperform ASIC competitors—especially in the second half of the year. For 2024, Nvidia’s processor revenue is projected to be approximately $98 billion, AMD’s around $5 billion, AVGO’s about $8 billion, and the combined revenue of Alchip/MRVL roughly $2 billion. This implies that commercial silicon accounts for roughly 90% of the market share, while ASICs constitute about 10%. We expect the 90% share for commercial products to increase slightly this year.

So why is it presumed that AMD will fail to meet its stretch goals while ASICs will succeed? In our view, AMD has just as much potential to achieve its SAM as ASIC competitors, and this is perceived by buyers as a “show-me” story. So why has ASIC not yet become a “show-me” story? In our perspective, ASICs should also be expected to deliver; this does not mean that either technology offers a guaranteed solution, but rather that the challenges of competing with Nvidia should not be taken lightly.

It is difficult to say that the ASIC relationship provides suppliers with a more fixed market share, as nearly every ASIC we know of faces direct competition. For example, MediaTek (as reported by Charlie Chan) is expected to challenge Broadcom within the Google TPU ecosystem, and Alchip (also reported by Charlie Chan) is anticipated to challenge Marvell within the Amazon (as reported by Brian Nowak) Trainium ecosystem. Recent reports indicate that Meta (also reported by Brian Nowak) is considering the acquisition of a Korean ASIC design—suggesting that its relationship with Broadcom is not exclusive—and Meta is also investing significantly in AMD. Bytedance is Broadcom’s third ASIC customer, but there is also the possibility that they have alternative ASIC designs from Chinese vendors in the pipeline due to export control issues. In fact, export controls on AI-related shipments to China have lowered the technological threshold to 80% of the state‑of‑the‑art, creating a highly open competitive environment. OpenAI could become a major ASIC user, but reports indicate that they are already working with multiple suppliers.

Nevertheless, Broadcom and Marvell possess enviable capabilities in this field that will undoubtedly drive growth. Success begets success, yet there are clearly challenges within the ASIC domain as well.

We expect that in 2025, Nvidia and AMD will outperform ASIC competitors—especially in the second half of the year. For 2024, Nvidia’s processor revenue is projected to be approximately $98 billion, AMD’s around $5 billion, AVGO’s about $8 billion, and the combined revenue of Alchip/MRVL roughly $2 billion. This implies that commercial silicon accounts for roughly 90% of the market share, while ASICs constitute about 10%. We expect the 90% share for commercial products to increase slightly this year.

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So why is it presumed that AMD will fail to meet its stretch goals while ASICs will succeed? In our view, AMD has just as much potential to achieve its SAM as ASIC competitors, and this is perceived by buyers as a “show-me” story. So why has ASIC not yet become a “show-me” story? In our perspective, ASICs should also be expected to deliver; this does not mean that either technology offers a guaranteed solution, but rather that the challenges of competing with Nvidia should not be taken lightly.

It is difficult to say that the ASIC relationship provides suppliers with a more fixed market share, as nearly every ASIC we know of faces direct competition. For example, MediaTek (as reported by Charlie Chan) is expected to challenge Broadcom within the Google TPU ecosystem, and Alchip (also reported by Charlie Chan) is anticipated to challenge Marvell within the Amazon (as reported by Brian Nowak) Trainium ecosystem. Recent reports indicate that Meta (also reported by Brian Nowak) is considering the acquisition of a Korean ASIC design—suggesting that its relationship with Broadcom is not exclusive—and Meta is also investing significantly in AMD. Bytedance is Broadcom’s third ASIC customer, but there is also the possibility that they have alternative ASIC designs from Chinese vendors in the pipeline due to export control issues. In fact, export controls on AI-related shipments to China have lowered the technological threshold to 80% of the state‑of‑the‑art, creating a highly open competitive environment. OpenAI could become a major ASIC user, but reports indicate that they are already working with multiple suppliers.

Nevertheless, Broadcom and Marvell possess enviable capabilities in this field that will undoubtedly drive growth. Success begets success, yet there are clearly challenges within the ASIC domain as well.

We expect that in 2025, Nvidia and AMD will outperform ASIC competitors—especially in the second half of the year. For 2024, Nvidia’s processor revenue is projected to be approximately $98 billion, AMD’s around $5 billion, AVGO’s about $8 billion, and the combined revenue of Alchip/MRVL roughly $2 billion. This implies that commercial silicon accounts for roughly 90% of the market share, while ASICs constitute about 10%. We expect the 90% share for commercial products to increase slightly this year.

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