ComputInsights #4 – Weekly Computing Market Insights

Market Growth

AI Data Centers Drive Surge in BBU Demand

The rapid expansion of AI server deployments is fueling demand for backup battery units (BBUs), with power capacities rising from 3–5kW to 8kW and beyond. Battery module manufacturers like Dynapack and AES-KY are scaling up production to meet this demand, driving higher profitability despite declining IT battery module sales. While speculation persists about Nvidia standardizing BBUs in its AI server racks, the broader trend toward AI-driven data centers is expected to sustain strong BBU market growth in the coming years.

Steady Innovation in Automotive ICs Despite Tariff Challenges

The automotive IC market remains weak as major chipmakers in Europe and the U.S. see no signs of recovery, with demand impacted by economic uncertainty and shifting EV policies. According to Liu and Chen of DIGITIMES Asia, automakers are cautious about restocking despite growing interest in new technologies like OLED displays and automotive Ethernet. Ongoing tariff conflicts and geopolitical tensions further cloud the market outlook, making a 2025 recovery uncertain.

Chinese Scientists Develop World’s First AI Chip Using Carbon Nanotubes

Chinese scientists have developed the world’s first AI chip made from carbon nanotubes, achieving significant speed and energy efficiency improvements, according to SCMP 2025. This breakthrough positions carbon-based semiconductors as a potential alternative to traditional silicon chips, which face physical limitations as they scale down. Researchers believe this innovation could revolutionize AI computing by enabling faster and more sustainable chip technology, SCMP 2025 reported.

Chip Industry Investments Remained Strong in 2024 Despite Project Delays

Investment in the semiconductor industry continued at a steady pace in 2024, even as some projects faced setbacks, according to Semiconductor Engineering 2025. While certain initiatives encountered delays due to economic uncertainties and supply chain disruptions, funding for advanced chip manufacturing and research remained resilient. The ongoing commitment to semiconductor innovation highlights the industry’s long-term growth potential and strategic importance, Semiconductor Engineering 2025 reported.

M&A and Investments 

Taiwan-Japan Semiconductor Partnership Drives Global Innovation

Taiwan and Japan’s collaboration in semiconductors fuels global technological progress while balancing competition and cooperation. Taiwan dominates advanced chip manufacturing through TSMC, while Japan supplies essential materials like photoresists and etching gases, creating a deeply interdependent supply chain. As Japan invests in domestic semiconductor production, both nations must navigate geopolitical challenges and technological shifts to sustain a stable and innovative partnership.

Company-Specific News

King Yuan Electronics Explores US Expansion Amid AI Chip Demand

King Yuan Electronics, a key chip testing partner for Nvidia and TSMC, is considering establishing a production line in the US to support the growing demand for AI and High-Performance Computing (HPC) chips. Chairman Lee Chin-kung emphasized that this move aligns with TSMC’s $100 billion US expansion, while the company also explores opportunities in Southeast Asia. With AI-related revenue expected to exceed 20% of total earnings in 2025, King Yuan is ramping up investments, including a new fab in Tongluo Township and a facility upgrade in Miaoli County, increasing capital expenditures by 68% to $709.2 million.