The latest financial report from Micron has sent shockwaves through the tech industry, with the company’s Q3 earnings and guidance for the second quarter of next year coming in below expectations. This has led some analysts to conclude that the “supercycle” for AI PCs and smartphones may be nothing more than a myth.
According to semiconductor analyst Daniel Newman, Micron’s struggles are largely due to a weaker-than-expected market for memory products used in PCs and smartphones. While high-bandwidth memory (HBM) is set to become a big market for the company, its primary source of revenue is still tied to traditional memory chips.
Newman argues that the AI PC “revolution” has been overhyped, with demand driven more by the general desire to upgrade rather than actual need for AI-powered features. Several reports from market analysis firms have confirmed this, suggesting that users are more interested in upgrading to newer devices rather than adopting AI PCs.
Qualcomm’s struggles with its new Snapdragon X chips for Copilot+ laptops and Intel’s relatively high return rates for these laptops also suggest that demand for AI PCs is not as strong as expected. However, the company is planning to lower prices on its upcoming Snapdragon X PCs, which could indicate a shift in strategy.
Newman notes that while there may not be much use for running AI locally on a PC, the cloud-based services like ChatGPT are still driving demand for AI technology. The analyst argues that the lack of demand for AI PCs is not a sign that the entire AI industry is in trouble, but rather a warning sign that AI might be a bubble.
The outlook for the AI industry remains uncertain, with some experts arguing that it’s already a gimmick with no real use in daily life. However, others believe that the growth of HBM and demand for AI chips in data centers could still drive innovation and investment in the sector.
Source: https://www.tomshardware.com/tech-industry/artificial-intelligence/ai-pc-revolution-appears-dead-on-arrival-supercycle-for-ai-pcs-and-smartphones-is-a-bust-analyst-says-as-micron-forecasts-poor-q2