Hot spot丨Rental chips, is a good idea
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Preface:
At present, the global chip environment is not optimistic, and there has been a surplus of chips in the industry. Chip inventories are increasing, which is a microcosm of the broader economic environment.
New thinking about chip business models
The oversupply of the chip market means that the global chip shortage under the super demand for two years is suddenly a thing of the past.
As interest rates have risen, stocks have fallen, recession fears have risen, consumer demand for electronics has weakened.
For consumers, the current situation in the chip space is good news, and they can get a lot of products faster than a year ago, sometimes even cheaper.
For chipmakers, the shift has sparked a wave of layoffs and cuts in capital spending as companies try to repair eroding profitability levels in recent months.
Historically, the semiconductor industry has adopted a product delivery model, where a product is locked into the final product through a build and release model that does not provide additional functionality at the hardware level.
This makes chip companies lose more opportunities to provide value services.
The reason behind starting to experiment with chip leasing
As Moore's Law slows, scaling difficulties make it difficult for chip companies to shorten time-to-market for emerging hardware.
As a result, many companies want to capture more value than just selling chips at once.
The service model is a means for enterprises to make up for their shortcomings, and Intel, Samsung, NVIDIA, Qualcomm, etc. are trying to enter the service model.
On the one hand, this type of model can continue customer service and develop another charging model;
On the other hand, extended services can help customers reduce costs and get what they want more conveniently.
At present, the most likely to adopt the chip leasing model is cloud service vendors and HPC vendors.
Such manufacturers often need to face scenarios with high computing intensity, high concurrency, and complex applications, and chip performance is extremely important to them, and high-performance chips often need to occupy a large amount of expenditure.
Samsung launched a high-end memory chip rental service
Samsung Electronics is planning to launch a high-end memory chip leasing service to ensure stable revenue.
Under the new business model, Samsung plans to lend memory semiconductors for high-performance computing (HPC), such as next-generation CXL DRAM packages and data storage devices called SSDs, to cloud service companies, including Google, and collect rent from them.
By closing deals at pre-set contract prices while receiving system management services throughout the lifecycle of such chips, customers will be able to reduce the costs associated with chip procurement.
Samsung plans to lease storage products for high-performance computing, such as next-generation memory expanders, DRAM modules and SSDs, to cloud service companies, including Google.
It hopes that the leasing business will account for at least 10% of the overall DRAM sales revenue in the future.
Intel Launches [On Demand Program]
In the On Demand plan, there is a consumption mode and an activation mode.
The consumption model is billed on a pay-as-you-go basis, while the activation model requires the purchase of a license, but a one-time buyout for perpetual activation.
There are also two types of unlockable CPU functions, one is Intel's own CPU accelerators and security features, which accelerate specific workloads and improve security.
In summary, Intel's approach is to upgrade the customer's machine without changing the actual hardware by giving the customer a CPU that has the function disabled but can activate the function when needed.
Conclusion: New benefits of the leasing model
On the one hand, the leasing model can resist the [roller coaster] cycle fluctuations of memory products and reduce investment risks.
On the other hand, it can also lower the one-time purchase threshold for users to use high-end DRAM.
For customers, the leasing model can reduce capital expenditure risk and provide more flexibility to meet diversified DRAM needs.
For Amazon, Google and other vendors, the business model of cloud services involves a variety of XaaS leasing services, so they will be more accepting of high-end DRAM leasing models.
In the process of leasing and use, it can reduce the operation and maintenance costs of users.
At the same time, cloud service providers can further reduce the construction cost of hardware devices and consolidate computing and storage efficiency.
By expanding the leasing business model, memory manufacturers can lock in customers in advance during the fluctuation cycle of the memory market to ensure revenue and profits.
At present, the global chip environment is not optimistic, and there has been a surplus of chips in the industry. Chip inventories are increasing, which is a microcosm of the broader economic environment.
New thinking about chip business models
The oversupply of the chip market means that the global chip shortage under the super demand for two years is suddenly a thing of the past.
As interest rates have risen, stocks have fallen, recession fears have risen, consumer demand for electronics has weakened.
For consumers, the current situation in the chip space is good news, and they can get a lot of products faster than a year ago, sometimes even cheaper.
For chipmakers, the shift has sparked a wave of layoffs and cuts in capital spending as companies try to repair eroding profitability levels in recent months.
Historically, the semiconductor industry has adopted a product delivery model, where a product is locked into the final product through a build and release model that does not provide additional functionality at the hardware level.
This makes chip companies lose more opportunities to provide value services.
The reason behind starting to experiment with chip leasing
As Moore's Law slows, scaling difficulties make it difficult for chip companies to shorten time-to-market for emerging hardware.
As a result, many companies want to capture more value than just selling chips at once.
The service model is a means for enterprises to make up for their shortcomings, and Intel, Samsung, NVIDIA, Qualcomm, etc. are trying to enter the service model.
On the one hand, this type of model can continue customer service and develop another charging model;
On the other hand, extended services can help customers reduce costs and get what they want more conveniently.
At present, the most likely to adopt the chip leasing model is cloud service vendors and HPC vendors.
Such manufacturers often need to face scenarios with high computing intensity, high concurrency, and complex applications, and chip performance is extremely important to them, and high-performance chips often need to occupy a large amount of expenditure.
Samsung launched a high-end memory chip rental service
Samsung Electronics is planning to launch a high-end memory chip leasing service to ensure stable revenue.
Under the new business model, Samsung plans to lend memory semiconductors for high-performance computing (HPC), such as next-generation CXL DRAM packages and data storage devices called SSDs, to cloud service companies, including Google, and collect rent from them.
By closing deals at pre-set contract prices while receiving system management services throughout the lifecycle of such chips, customers will be able to reduce the costs associated with chip procurement.
Samsung plans to lease storage products for high-performance computing, such as next-generation memory expanders, DRAM modules and SSDs, to cloud service companies, including Google.
It hopes that the leasing business will account for at least 10% of the overall DRAM sales revenue in the future.
Intel Launches [On Demand Program]
In the On Demand plan, there is a consumption mode and an activation mode.
The consumption model is billed on a pay-as-you-go basis, while the activation model requires the purchase of a license, but a one-time buyout for perpetual activation.
There are also two types of unlockable CPU functions, one is Intel's own CPU accelerators and security features, which accelerate specific workloads and improve security.
In summary, Intel's approach is to upgrade the customer's machine without changing the actual hardware by giving the customer a CPU that has the function disabled but can activate the function when needed.
Conclusion: New benefits of the leasing model
On the one hand, the leasing model can resist the [roller coaster] cycle fluctuations of memory products and reduce investment risks.
On the other hand, it can also lower the one-time purchase threshold for users to use high-end DRAM.
For customers, the leasing model can reduce capital expenditure risk and provide more flexibility to meet diversified DRAM needs.
For Amazon, Google and other vendors, the business model of cloud services involves a variety of XaaS leasing services, so they will be more accepting of high-end DRAM leasing models.
In the process of leasing and use, it can reduce the operation and maintenance costs of users.
At the same time, cloud service providers can further reduce the construction cost of hardware devices and consolidate computing and storage efficiency.
By expanding the leasing business model, memory manufacturers can lock in customers in advance during the fluctuation cycle of the memory market to ensure revenue and profits.