Kneron, a semiconductor startup based in the United States, has recently secured additional funding to propel the commercialization of its artificial intelligence (AI) chips. With hopes of rivaling industry leader Nvidia, the company raised $49 million, bringing its total funding to $97 million. Investors in this funding round include Taiwanese giant Foxconn, known for assembling Apple’s iPhones, and Alltek, a communications tech company. Kneron aims to capitalize on the growing investor interest in AI and the underlying chip technology, exemplified by Nvidia’s remarkable 180% rally this year and the successful initial public offering of semiconductor designer Arm in the U.S.
The Differentiating Factor: Edge AI
While Nvidia primarily focuses on graphics processing units (GPUs) that run in servers and data centers, Kneron sets itself apart by designing chipsets for consumer electronics and vehicles, enabling AI at the edge. This means that AI functionality operates directly on the device, eliminating the need for constant cloud connectivity. Advocates assert that on-device AI enhances security and speed. Kneron’s semiconductors, known as neural processing units (NPUs), offer an alternative to cloud-based AI services such as ChatGPT. By developing NPUs, Kneron seeks to address the industry’s demand for cost-effective AI solutions. The company’s latest product, the KL730, specifically targets the automotive sector, with the potential to support autonomous driving.
Kneron faces fierce competition from major players like Qualcomm and MediaTek, who also strive to achieve on-device AI capabilities through their chip designs. Additionally, numerous startups are emerging in the AI semiconductor space. Despite the challenging landscape, Kneron has managed to secure prominent backers, including Foxconn. Notably, Foxconn’s investment in Kneron aligns with its efforts to diversify beyond electronics assembly and expand into electric cars and semiconductors. Through the partnership, Foxconn and Kneron aim to accelerate the deployment of advanced AI, particularly for automotive applications. Together, they plan to develop an ultra-lightweight AI chip capable of operating generative pre-trained (GPT) models from the cloud. GPT models form the foundation of AI applications like ChatGPT.
While Kneron collaborates with world-leading contract chip manufacturer TSMC for chip production, the company, like others in the semiconductor industry, faces geopolitical uncertainties influenced by the U.S.-China rivalry. The risk of a potential Chinese invasion of Taiwan, where TSMC is headquartered, poses a threat to the global supply of semiconductors. To mitigate this risk, Kneron plans to establish a more distributed production footprint within the U.S. starting next year.
Kneron’s recent funding success exemplifies the significant investor interest in AI and chip technologies. As the company expands its efforts in enabling AI for autonomous driving, it aims to challenge industry leader Nvidia. Kneron’s strategy of focusing on edge AI and designing cost-effective NPUs sets it apart from its competitors. With support from prominent investors like Foxconn, Kneron is well-positioned to make its mark in the semiconductor industry. However, geopolitical concerns surrounding semiconductor production and the U.S.-China rivalry remain important factors for the company to consider. In the pursuit of global prominence, Kneron’s strategic decision to establish a distributed production footprint in the U.S. ensures a more diversified supply chain. As the AI chip market continues to thrive, Kneron’s innovative approach and technological advancements will play a crucial role in shaping the future of artificial intelligence.