“In the past five years, there have been many fabless (semiconductor design specialists) that have developed semiconductor chips for artificial intelligence (AI), but not many of them have reached the stage where they are actually applied to applications. ADTechnology is leading the optimization process to integrate Fabless-designed chips into sets (finished products) and contributing to ecosystem enhancement.
The big wave of AI, machine learning, and large language models (LLM) are posing new challenges to the semiconductor industry. High-performance semiconductors are needed to implement this, but the difficulty of actually manufacturing chips has become much more difficult. It is meaningless to develop chips that do not materialize even if they have innovative ideas.
In the midst of the massive shift towards AI, what role can semiconductor design houses play? Park Jun Kyu, CEO of AD Technology, at the new office in Pangyo Techno Valley 2nd Edition, he said, “It takes too much time and cost for Fabless to prepare platforms or interfaces that can apply AI chips to sets.” He added, “ADTechnology is instilling competitiveness in fabless by taking on this role.”
CEO Park also announced his vision to actively target the U.S. market this year, believing that as a design house, he has the competitiveness and know-how to not be left behind on the world stage.
◇ Advancement of design platform competitiveness, opportunity to lead the automotive field
ADTechnology creates and provides the remaining design platform so that fabless or set (finished product) companies can commercialize only one core chip. A design platform refers to a blueprint that depicts various other semiconductors that support chips developed by fabless and the circuits that connect the chips.
From a fabless perspective, chip development time and costs can be shortened because you only need to purchase a design platform from a design house and insert the core AI chip developed in-house. Next, it is converted into a manufacturing drawing according to the Samsung Foundry (consignment production) process and provides one-stop service from design to production and post-processing (packaging and testing).
CEO Park is especially paying attention to the automotive field. This is because in the future autonomous vehicles, high-performance, high-capacity, and high-difficulty system semiconductors are significantly needed, making the role of design houses more important. CEO Park said, “We have been preparing ‘automotive semiconductor certification support’ since last year,” and, “The goal is to internalize all platforms, libraries, and certifications required for automotive chip production so there are no difficulties in producing fabless-designed chips.”
ADTechnology is working to obtain ISO26262, an international standard certification essential for automotive semiconductor development. This is to ensure that fabless or automakers developing automotive semiconductors can produce chips using ADTechnology even if they do not have such certification.
CEO Park said, “We are currently developing automotive chips with several startups.” He explains that ‘Tier 1’ groups that procure parts to automobile original equipment manufacturers (OEMs) or OEMs have so far procured semiconductors from automotive semiconductor companies such as NXP of the Netherlands or Infineon Technologies of Germany, but the market trend is changing. Now, as there is a need for OEMs and Tier 1s to internalize system semiconductors, there is a movement to seek collaboration with fabless, and if a design house has the infrastructure, it can begin direct sales to automakers.
CEO Park also said, “I strongly believe that automakers should create an ecosystem centered around themselves and internalize chips in order to differentiate their products” and “There is an opportunity for our partner (fabless), OEM, Tier 1, and ADTechnology to cooperate. “There will be more in the future,” he said. He continued by emphasizing, “In order to ride this trend, we are preparing to have a competitive edge in the automotive field.”
CEO Park also said, “I strongly believe that automakers should create an ecosystem centered around themselves and internalize chips in order to differentiate their products” and “There is an opportunity for our partner (fabless), OEM, Tier 1, and ADTechnology to cooperate. “There will be more in the future,” he said. He continued by emphasizing, “In order to ride this trend, we are preparing to have a competitive edge in the automotive field.”
He is also confident that his company has strong competitiveness in the field of cutting-edge packaging-related solutions such as chiplets. He said, “More than half of the orders received in the future will be products that require 2.5D, 3D, and chiplet packaging technology” and “When I meet domestic, American, and European customers, I see a need to manufacture chips using chiplets. We will support it by pouring in ADTechnology’s system-on-chip (SoC) and packaging technology,” he said.
To implement 2.5D packaging or chiplets, circuit blocks must be placed with this in mind from the design stage, so it is an important issue to determine how competitive a design house is in the packaging field. AD Technology has an internal organization dedicated to advanced packaging.
◇ Imminent order for U.S. corporation, confidence in external growth
CEO Park emphasized that this year will be the starting point for improving performance and achieving success in the U.S. market. He said, “Last year’s sales were sluggish, but this year will see significant growth,” and added, “We should be able to demonstrate a lot of actual order results.”
The revenue structure of Design House is broadly divided into development and mass production sales. When the customer delivers semiconductor prototypes of the desired specifications, they receive development fees, and mass production sales start from that point onwards. To increase revenue volume, the proportion of mass production sales must increase.
CEO Park explained that the development tasks undertaken so far are now transitioning to mass production, which will contribute to revenue expansion. He said, “We are hiring in advance to expand our workforce towards the goal of reaching 1,000 employees and providing training,” and added, “This is to prepare for the increase in order tasks starting this year.” Currently, ADTechnology has around 600 employees.
The company is particularly hopeful that this year will see the first fruits in the previously unproductive U.S. market. AD Technology established its U.S. subsidiary in 2021 and is now in its third year of operation. He said, “We can expect tangible results from the orders directly placed by the U.S. subsidiary this year,” and added, “We have been in discussions with many potential customers until last year.”