Qualcomm Snapdragon X Elite Unveiled: ARM-based SoC for Windows-powered AI PCs

  • Qualcomm’s new Snapdragon X Elite SoC targets the AI PC market as the PC market bottoms out.
  • Made on TSMC’s 4nm process node, the new Snapdragon X Elite features a powerful 12-core Oryon CPU.
  • Between the Oryon CPU, Adreno GPU, and the Hexagon NPU, the Snapdragon X Elite can deliver up to 75 TOPS of AI computing performance.

Qualcomm announced its latest Snapdragon X Elite compute platform at the 2023 Snapdragon Summit held in Hawaii on October 24-26, during which the company also launched the Snapdragon 8 Gen 3 mobile platform. The Snapdragon X Elite is an ARM-based processor designed for personal computers and aims at delivering powerful performance and better power efficiency along with cutting-edge on-device generative AI features.

Qualcomm looking to expand its ARM SoC Smartphone Success to the PC Platform

Based on its brand-new ARM CPU core ‘Oryon’, developed from its Nuvia acquisition, Qualcomm’s Snapdragon X Elite SoC is built on TSMC’s 4nm process node. The CPU uses ARM’s 8.7 instruction set and features 12 high-performance ‘Oryon’ cores clocked at 3.8GHz. There is also a dual-core boost feature offering peak clock speeds of up to 4.3GHz. Qualcomm says the Snapdragon X Elite can offer 2x faster CPU performance than the competition while consuming one-third of the power.

counterpoint qualcomm snapdragon x elite cpu config
Source: Qualcomm

Combined with 136GB/s LPDDR5x memory bandwidth, and up to a total of 42MB cache, including three 12MB L2 cache, and the remaining 6MB shared with the overall CPU. The SoC comes with an integrated Adreno GPU as well as Hexagon NPU and sensing hub to enable multiple AI functions. This is effectively moving AI inferencing to the network edge (laptop). The Adreno GPU supports DirectX, OpenCL, and Vulcan APIs.

Built for on-device AI experiences, the Hexagon NPU can deliver peak AI computing performance of 45 TOPS, which Qualcomm claims is 4.5 times faster than the competition. And between the CPU, GPU, and NPU, the SoC can offer peak AI computing performance of 75 TOPS.

The SoC was designed to run large language models on-device, with up to 13 billion parameters, thus offering the claimed fastest Stable Diffusion performance by a laptop chip on the market. It can generate 30 tokens per second for seven billion large language models (LLMs).

counterpoint qualcomm snapdragon x elite specs at a glance
Source: Qualcomm

The SoC is designed in a way that it can be used on laptops, tablets, and even desktop PCs. Qualcomm showcased a 12W fanless reference design, along with 23W, 45W, and even the one with 80W thermal design power (TDP). TDP measures the maximum amount of heat produced by the chip in terms of watts.

PC vendors including Lenovo, HP, Dell, Microsoft, and Acer are all working to bring Snapdragon X Elite-powered laptops to the market by mid-2024.

WATCH: “AI PC” Era Beckons with Snapdragon X Elite: Deep Dive with Qualcomm’s Kedar Kondap

Snapdragon X Elite Benchmarks Show Impressive Gains over Apple Silicon, Intel and AMD Processors

At the Snapdragon Summit, we also had an opportunity to take a sneak peek at the Snapdragon X Elite benchmarking, where Qualcomm tested the SoC on both Windows and Linux (using Geekbench 6.2). Cinebench, UL Procyon AI, Wildlife Extreme, Aztec Ruins, and PC Mark were some of the other popular benchmarks on which the Snapdragon X Elite was tested.

counterpoint qualcomm snapdragon x elite benchmark configs
Source: Qualcomm

The reference design laptops were loaded with some popular benchmarks to show how they performed over the competition. There were two TDP configurations — Config A laptop with 80W max and Config B laptop with 23W.

Below are some of the scores that Qualcomm shared:

counterpoint qualcomm snapdragon x elite benchmarks
Source: Qualcomm

ARM-based Laptops to Further Gain Share at x86’s Expense

Qualcomm’s Snapdragon X Elite SoC was built completely on an ARM IP structure, instead of the long-lasting x86 IP structure in the PC industry, which supports our view of the double-digit YoY percentage growth in ARM-based laptop shipments.

counterpoint ai pc market forecast

After Microsoft and Qualcomm’s exclusive agreement to develop ARM-based Windows-compatible chips expires in 2024, we are expecting more chip vendors to enter the market and that will make the PC market more competitive. Intel could face more challenges to its long-lasting dominance in the PC CPU market.

We believe there are still challenges for the ARM-based PC ecosystem and apps/software support. Software developers have spent decades and billions of dollars writing code for Windows that runs on the x86 architecture. Even if Microsoft smoothly migrates its Windows software portfolio to ARM-based processors, it could take a lot of time for the ARM-based ecosystem to see similar migrations and maturity.

AI PC to Drive Another Wave of Shipment Growth in 2024

In 2023, PC OEMs and chip vendors are all dedicated to developing products/solutions for the AI universe. Over the past five quarters, PC OEMs have been working hard to resolve inventory issues and had a hard time searching for a new growth engine for the PC business. Now, the AI PC market is witnessing a surge, underpinned by Intel and Qualcomm’s new PC CPU platform, which is just around the corner. These AI-enabled PC models will likely be available around mid-2024.

We now expect AI PCs to have an over 50% 10-year CAGR from 2020, and after 2026, they will dominate the PC market. Intel, Qualcomm, and other PC CPU makers are working closely with PC OEMs toward the next-generation mainstream models, marking a new chapter for the PC industry.

COMPUTEX 2023: AI Solutions, Capabilities in Focus

Tech giants showcased their most advanced solutions in AI and computing at the COMPUTEX 2023 show in Taipei in the first week of June. If NVIDIA CEO Jensen Huang’s keynote address focused on the company’s game-changing innovations around AI, Arm CEO Rene Haas’ keynote had compelling demonstrations showcasing Arm’s capabilities in AI. Qualcomm focused on on-device intelligence enhancement and Hybrid AI as the mainstream format of AI in the future. With meaningful upgrades in computing capability, we expect to see the beginning of a new chapter in the coming years. In the following sections, we summarize the key takeaways from COMPUTEX 2023.

NVIDIA: Grace Hopper Superchip to boost AI revolution 

The world’s first-of-its-kind Grace Hopper Superchip, which is manufactured by the TSMC 4nm process node, is likely to level up NVIDIA’s determination on AI. In addition, more GPUs will be used for generative AI training and inference models, which will accelerate the transformative technology in the near term, highlighted Mr. Huang.

Our Associate Director, Brady Wang, shared his ideas and insights at the influential event.

NVIDIA also introduced the Spectrum-X platform, a fusion of the Spectrum-4 switch and Bluefield-3 DPUs, which boasts a record 51Tb/sec Ethernet speed and is tailor-made for AI networks. Combined with BlueField-3 DPUs and NVIDIA LinkX optics, it forms an end-to-end 400GbE network optimized for AI clouds. This innovation not only fits NVIDIA’s target but also consumes a great amount of foundry capacity, especially TSMC.

NVIDIA ACE Framework

Counterpoint Research - Nvidia ACE_Dark
Source: Nvidia

NVIDIA: Avatar Cloud Engine (ACE) for Games

NVIDIA did not forget its loyal gamers. This time, it introduced the Avatar Cloud Engine (ACE) for Games, a groundbreaking custom AI model service. ACE empowers non-playable characters (NPCs) in games with AI-driven natural language interactions, revolutionizing the gaming experience. With ACE, gamers can enjoy more immersive and intelligent gameplay.

Notes from analyst Q&A with NVIDIA founder and CEO Jensen Huang

  • If most of the workload involves training AI models, the data center operates as an AI factory. An optimal computer is capable of handling both training and inference tasks, although the selection of processors is contingent upon the specific inference type. 
  • In the foreseeable future, AI is poised to become the predominant force within the realm of NPCs in video games. These NPCs will possess a distinctive narrative and contextual background, effortlessly engaging with one another in a harmonious manner. Their movements will be fluid and their comprehension of instructions will be exceptional.
  • AI revolutionizes the user experience on PCs, propelling the advancement of personalized recommender systems. Furthermore, even on compact smartphones, it taps into extensive personalized internet data. As a result, future interactions generate real-time, customized content, transitioning towards generative processing to accommodate the escalating demand for personalized information. This groundbreaking development signifies the dawning of a new era characterized by the proliferation of generated and augmented information, thereby departing from the previously dominant retrieval-centric paradigm.
  • InfiniBand excels in high-performance computing, offering superior throughput for single computers and AI factories. It dominates in supercomputers and AI systems, while Ethernet is prevalent in cloud environments.
  • China leads the way in cloud services, consumer internet and digital payments. It has swiftly advanced in electric and autonomous vehicles, showcasing local innovation through numerous GPU start-ups. This underscores China’s technological dominance and promising future growth.
  • Omniverse streamlines computer setup with cloud integration and partnerships, enabling effortless information streaming through browser-based access. It optimizes factory design and simulation, minimizing work, errors and expenses.

Arm: Everything now is a computer; AI runs on Arm

Citing the remarkable 260% increase in data center workloads from 2015 to 2021, Arm CEO Rene Haas emphasized the pivotal role of data centers, automotive technology and AI in driving the compute demand powered by ARM designs.

According to Counterpoint Research, Arm-based notebooks will gain over Intel and AMD, almost doubling their shipment share to 25% by 2027 from 14% today.

Laptop Shipment Share by CPU/SoC Type %

Counterpoint Research - laptop shipment by CPU type

source: Counterpoint Research

AI emerged as a focal point during Haas’ keynote, where he captivated the audience with compelling demonstrations showcasing Arm’s capabilities. That said, Arm is poised to support an even broader range of applications in the future.

We also echo Arm’s view and believe that generative AI, digital twins and edge computing will emerge as top technology trends in 2023 and affect the whole tech industry.

Qualcomm: Focus on on-device intelligence enhancement, Hybrid AI

Qualcomm’s “AI” Hexagon processor offers 3-5 times better computing performance compared to existing CPU/GPU solutions. The company aims to expand the application of its Snapdragon 8cx Gen 3 processor to the laptop industry with thorough support from Microsoft.

For AI, Qualcomm believes there are limitations to the efficiency improvements of Edge AI or Cloud AI. However, leveraging Qualcomm’s connectivity solutions and combining edge AI with cloud AI can provide incremental benefits in terms of cost/energy savings, privacy and security enhancements, reliability, and latency. Therefore, the company guides that Hybrid AI (Edge AI + Cloud AI) will be the mainstream format of AI in the future.


With the COVID-19 pandemic loosening its grip, COMPUTEX was back in its on-site mode this year in Taipei with solid and eye-catching AI solutions. We are stepping into a new computing era, with generative AI set to transform our lives. Not only server vendors and data center hyper-scalers, but mobile and PC vendors are also working together to facilitate technology improvements with AI support.

Counterpoint’s analysts continue to work closely with the tech product market to monitor all changes and trends.

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Q1 2023 Global PC Shipments Mark Another Quarterly Decline, Gradual Recovery Expected in H2

  • Q1 2023 global PC shipments fell 28% YoY.
  • Inventory digestion likely to end in Q2 2023.
  • Although PC demand is expected to gradually recover in H2 2023, full-year shipments are set to decline by double-digit percentages.
  • Windows 11, commercial/flagship models and replacement cycles are key 2024 growth drivers.

Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – April 17, 2023

Global PC shipments fell 28% YoY in Q1 2023

Global PC shipments dropped 28% YoY in Q1 2023 to hit 56.7 million units, the lowest quarterly numbers in the past 10 years, excluding Q1 2020 when the COVID-19 pandemic outbreak interrupted manufacturing and production. The Q1 2023 decline was due to the continued delay in demand pickup amid an inventory correction during the quarter. However, we are cautiously optimistic and believe the overall PC market will start gradually recovering in the latter half of Q2 2023 which will pave the way for comparably stronger momentum in H2 2023.


Global PC Shipments by Vendor, Q1 2023

Counterpoint Research - Q1 2023 global PC shipments

The last mile of inventory digestion since mid-2022

The PC and PC components’ inventory issue has remained for more than half a year due to frozen demand and aggressive double booking. As we have already entered the post-pandemic era and are settling in with the new work environment and lifestyle, the PC industry has also adapted a lot with incremental demand from each consumer. However, increased devices per person do not imply continuous high-level demand for PCs, especially during economic downturns. Fortunately, based on feedback from OEM/ODMs, we are close to the end of PC inventory digestion which is expected by H1 2023. PC OEMs could begin executing their next step of PC strategies as consumer demand is gradually increasing.

Major OEMs, especially Apple, had a tough time in Q1 2023

Lenovo remained the world’s largest PC vendor in Q1 2023, despite a huge decline in shipments during the quarter. The company registered shipments of 12.8 million units in Q1 2023 and a market share of 23%. HP reported a relatively narrow adjustment in the quarter off a lower base in the year-ago period, maintained its second rank and retained its 21% market share. Dell’s better-than-expected performance in the US helped the company rank third in terms of global PC shipments during the quarter with a 17% market share. Apple suffered the most, marking a 38% YoY decline in shipments due to a higher base in the year-ago period and a longer replacement cycle.

We foresee slow-paced demand recovery

It is widely expected that PC demand will recover in H2 2023. PC OEMs are also looking forward to a pickup in demand following the inventory digestion. Although we did say that demand will recover post-inventory normalization, we are afraid demand recovery will take slightly longer to start accelerating. On the other hand, we believe the rate of demand recovery will vary across different categories. Based on our checks, demand for commercial segments and premium/flagship consumer product lines will likely recover faster than others and are expected to sell better in H2 2023. Arm laptops continue to be relatively vulnerable due to a lower shipment base a year ago and are more eye-catching to customers.

Inventory Correction Continues while YoY decline improves

Counterpoint Research - Shipment Performance Q1 2023


Another YoY double-digit percentage shipment contraction is expected in 2023

Although OEM vendors reported another quarterly shipment decline in Q1 2023, they maintain a cautiously-optimistic tone for PC demand in H2 2023. We further adjust our 2023 global PC shipments forecasts and expect to see a double-digit percentage shipment decline throughout 2023 from the original high single-digit percentage shipment decline at the end of 2022. Additionally, we expect a bright 2024 due to renewal demand from Chromebook and Windows 11, coupled with a replacement cycle since the outbreak of the COVID-19 pandemic.

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Data Center CPU Market: AMD Surpasses Intel in Share Growth

  • The global data center CPU market’s revenue declined 4.4% YoY in 2022.
  • AMD registered a 62% YoY growth in its data center CPU revenue to hold a 20% market share.
  • Intel’s data center CPU revenue dropped by 16% YoY in 2022, while its market share fell to 71%.
  • ARM-based CPUs gained traction with Ampere, Graviton (Amazon) and Yitian (Alibaba) to surpass $1 billion in revenues for the first time.

New Delhi, Beijing, Seoul, Hong Kong, London, Buenos Aires, San Diego – February 27, 2023

The global data center CPU market’s revenue registered a 4.4% YoY decline in 2022, according to the latest research from Counterpoint’s Semiconductor Service. Macroeconomic headwinds and increased energy costs impacted the sales of data center CPUs during the year. Besides, from the architecture perspective, the addition of accelerators in the servers for workloads restricted the demand for additional CPUs for servers.

Counterpoint Research Data Center Market Q4 2022

Commenting on the companies’ 2022 performance, Senior Research Analyst Akshara Bassi said, “Even though Intel is still the market leader, its market share loss points to AMD’s rising product portfolio and better performance over Intel. AMD surpassed Intel in market share growth in 2022. Intel suffered due to continued delays in the release of its next-generation product Sapphire Rapids, generationally comparable to AMD’s Milan launched in 2021.

As demonstrated by hyperscalars AWS and Alibaba, ARM-based architecture chips continue to gain steam due to the ROI offered on varied workload deployments and off-the-shelf solutions from Ampere Computing, and shipping of data center CPUs from NVIDIA in H1 2023.”

Talking from the foundry perspective, Associate Director Dale Gai said, “As evidenced by wafer demand and foundry capacity of advanced nodes from TSMC, the total wafer sales at 5/4nm rose by 85% YoY in 2022. One of the demand drivers for the increased demand of advanced nodes is data center CPUs”

Market summary for 2022

Intel remained the market leader with a 71% share, although far from the share that it commanded till 2018. Its revenue from the segment dropped 16% YoY in 2022. The market share declined primarily due to delays in next-generation products and weakness in enterprise spending due to macroeconomic conditions.

AMD came second with a 20% market share primarily driven by increased adoption of its EPYC processor Milan. AMD is becoming a dominant force in the x86-based CPU for data centers, being increasingly adopted by cloud providers and SKUs of server companies. AMD registered a 62% YoY growth in its data center portfolio in 2022.

AWS’ in-house ARM-based chip Graviton, now in its third generation, has been among the early adopters of ARM architecture in a data center. AWS has increased Graviton’s penetration in its offerings and also expanded it to support ML-based instances with in-house accelerators, representing a shift from general-purpose compute to specific workloads.

Ampere Computing started to gain more traction in 2022 with its expansion from traditional cloud providers to enterprises by having its CPU in off-the-shelf servers from OEMs.

The comprehensive and in-depth “Data Center CPU Tracker” report is available. Please contact Counterpoint Research to access the report.

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Counterpoint Technology Market Research is a global research firm specializing in products in the technology, media and telecom (TMT) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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Counterpoint Research


Global PC Shipments See Record YoY Decline in Q4 2022

  • Global PC shipments fell 27.8% YoY in Q4 2022 to reach 65.2 million units.
  • For the full year of 2022, the shipments declined 15% YoY.
  • Macroeconomic headwinds, increasing inflation pressure and frozen PC demand affected the global PC market in 2022.
  • Soft demand in H1 2023 will cause heavy pressure on shipments. Therefore, we do not see annual shipment growth in 2023.


Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – January 19, 2023

Global PC shipments left Q4 2022 with a record-high YoY decline of 27.8% to reach 65.2 million units, according to Counterpoint Research’s data. Although inventory levels of several OEMs and ODMs likely peaked in Q3 2022, the year-end season failed to accelerate the PC shipment momentum in Q4. At 286 million units, the total PC shipments for 2022 also reflect a muted global PC demand with four consecutive quarters of YoY shipment declines. Therefore, we are not expecting a decent rebound in H1 2023.

Macroeconomic headwinds, increasing inflation pressure and frozen PC demand affected the global PC market in 2022, with shipments declining 15% YoY. Besides, consumers who bought new PCs were still enjoying the latest models, whereas enterprises were working more carefully on their budgets. Also, the lack of appealing functions and financial support could not bring in incremental demand in 2022, not to mention the aggressive inventory digestion target of OEMs since H1 2022.


Record YoY Shipment Decline in Q4 2022

Counterpoint Research - Global PC shipments

Source: Counterpoint Research


Lenovo continued to lead the market in Q4 2022 but with a flattish 23.7% share. Mild inventory correction dragged the company’s performance amid a lackluster holiday season. Its shipments declined 17% YoY in 2022 to take a 23.7% market share. We expect Lenovo’s shipment decline to normalize along with demand revival in the Chinese market in 2023.

HP secured its second place in Q4 2022 with a 20.3% share. Its shipments declined 29% YoY during the quarter but it was the only major PC OEM to report positive sequential shipment growth in Q4, thanks to improving shipment performance in North America and a lower base in Q3. HP had the largest shipment pullback in 2022 due to weak consumer demand across the globe. The company ultimately recorded a below 20% market share in 2022. But we expect a meaningful share rebound in 2023.

Dell’s 16.7% market share was the lowest in the past seven quarters largely due to an enterprise demand slowdown. As the economic situation remains weak, the company is not expected to see rapid pick-up for commercial models in 2023, which is crucial for Dell to narrow the market share gap with HP. Therefore, we may see pressures on Dell’s share (17.4% in 2022) and shipment performance in 2023.

Apple’s comparatively tiny 3% YoY shipment decline in Q4 2022 helped the company close the book with a flattish shipment volume performance for 2022. Apple kept gaining market share at the expense of x86-based vendors and recorded a double-digit share in the second half of 2022 and 9.4% in the full year. Arm-based M-series models helped the company weather the slump cycle in both consumer and commercial devices in 2022.

Global PC Shipments by Vendor, Q4 2022

Counterpoint Research - Global PC shipments_2

Source: Counterpoint Research


Windows on Arm a key focus in 2023

Despite near-term headwinds, we could still see global PC shipment volumes higher than pre-COVID levels in the coming years, thanks to the continuous work environment and lifestyle changes and delayed procurement from both consumer and commercial sectors after H1 2023. Consumer demand will likely see gradual rebound in H2 2023 followed by a slower warm-up in enterprise procurement. Soft demand in the first half will cause heavy pressure on global PC shipments. Therefore, we do not see annual shipment growth in 2023.

Eying Apple’s M-series success, Qualcomm’s Arm-based Oryon CPU will likely enter the market and heat up Windows-on-Arm momentum in 2023. We see mid-single-digit YoY shipment growth for Arm-based laptops compared to the global laptop market’s high-single-digit shipment decline in 2023.


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.



Global PC Shipments’ Double-digit Crash in Q3

Taipei, London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Seoul – October 25, 2022

Global PC shipments fell 15.5% YoY in Q3 2022 to reach 71.1 million units recording another wave of huge YoY declines after the severe annual and sequential falls in Q2, according to Counterpoint Research data. The Q3 2022 decline was largely due to demand weakness across both consumer and commercial markets, which was mainly driven by global inflation. Despite components shortage issues being largely resolved, OEMs and ODMs are holding a relatively conservative view on Q4 2022 and first half of 2023.

The lull in PC demand continued in the quarter despite broad promotional activities from major OEMs, especially for consumer product lines. In addition, inventory digestion processes have been activated to deal with abnormally high levels as we enter the second half of the year. Although it is the season of peak consumer device sales, PC OEMs believe the destocking process will continue into 2023. Based on our conversations with supply chain members, especially with components suppliers, the largest inventory numbers were in Q3 2022 and will likely begin to decline in coming quarters but there is uncertainty within the supply chain on when shipment growth will restart.

Global PC Inventory Accumulation Since 2022

Counterpoint Research - Global PC shipments

Source: Counterpoint Research

Lack of consumer demand in the back-to-school season, shrinking enterprise purchasing due to economic uncertainty and increasing promotional events all created a drag on Average Selling Price (ASP) growth momentum and also impacted PC market revenue.

Apple reported a counter-market 7% YoY shipment growth amid muted market momentum, thanks to its new product launch in late Q2 with shipments refilled after the China lockdowns in Q2 that interrupted ODM manufacturing schedules. Meanwhile, Asus reported a 9% YoY shipment decline in the quarter, reflecting a relatively resilient performance due to its enterprise focused strategy, in line with management’s target of outperforming shipment in 2022.

Lenovo booked a 16% YoY decline, largely in-line with the global PC market, consumer demand weakness was partly offset by enterprise spending. Its 23.7% market share remains flattish compared to last year, reflecting Lenovo’s strong position efforts to cope with a shaky market.

HP took an 18% share in Q3 with 12.7 million unit shipments. This is the second quarter of lower than 20% market share by HP since 2016, largely due to its higher consumer mix, which meant it exited Q3 with a 26.5% YoY decline.

Dell also reported more than a 20% YoY shipment decline with and 17% market share. Its 12 million units were a bit higher than Q3 2020, right before Dell began to benefit from working style changes post the initial waves of COVID.

Global PC Shipment by Vendor, Q3 2022

Counterpoint Research - Global PC shipments in Q3


PC market unlikely to grow until H2 2023

Overall, global PC shipments in the second half of 2022 will still be comparatively higher than the level before Covid broke out. However, Chip maker AMD claimed that PC market weakness already caused negative impacts to its results and outlook; while the management of Taiwan OEMs Acer and Asus, both shared their views that the PC industry will not recover until H2 2023.

Looking into 2023, the sky is still covered by dark clouds. We are also adjusting our 2022 shipment forecast to a 13% YoY decline on soft PC demand. Among all PC product segments, we believe Arm-based PCs and gaming PCs are poised to weather the market downturn best, with the help from Apple’s M-series offerings as well as incremental R&D efforts from chip makers and the wider ecosystem.

Infographic: Global Foundry Revenue Share | Q2 2022

Foundry Revenue Share by Vendors

TSMC gained 200 bps in terms of market share in Q2 2022, driven by leading technology nodes for iPhone AP and HPC-related ICs. The capacity utilization rate in Q2 in leading nodes was still at 95%-100% at TSMC. Samsung lost 100-200 bps during the quarter due to weaker demand for Qualcomm’s flagship smartphone SoCs. UMC, GF and SMIC managed to maintain their shares with high capacity utilization rates.

Foundry Revenue Share by Technology Nodes

5/4nm became the second largest node in Q2 2022 in terms of revenue share, accounting for 15% of industry sales, which were driven by smartphone SoCs (Apple, Qualcomm and MediaTek), ARM-based CPUs (Apple) and newly launched GPU accelerators from NVIDIA. 7/6nm remained the largest node, with increasing applications from CPU, GPU and networking processors. Sales from matured nodes started slowing down in Q2 2022 due to inventory adjustment from driver ICs and CMOS sensors.

Foundry Infographic Q2 2022

Use the button below to download the high resolution PDF of the infographic:


TSMC’s Quarterly High-performance Computing Sales Surpass Smartphones for First Time in Q1 2022

  • TSMC reported its Q1 2022 revenue at $17.6 billion (up 12% QoQ). Among its different segments, the high-performance computing (HPC) segment posted the highest growth rate at 26% QoQ.
  • HPC accounted for 41% of TSMC’s Q1 2022 revenue, while the smartphone segment accounted for 40%. It is the first time in TSMC’s history that HPC has become the largest sales contributor during one fiscal quarter.
  • TSMC’s major HPC customers in 2021 likely included AMD (including Xilinx), Nvidia, Broadcom, Marvell and Intel besides Apple as the top-selling one due to its Apple Silicon (M series) in PCs and tablets.  
  • Intel appeared to be the next major HPC customer by outsourcing more graphic silicon (discrete Arc series and iGPU tiles) and other CPU cores this year. Accordingly, it would be the second-largest customer in TSMC’s 3-nanometer node in 2023.
  • TSMC’s HPC segment is expected to account for 42% of its total revenue in 2022, including wafer and 2.5D/3D packaging services.  

Before TSMC’s investor conference on April 14, semiconductor industry experts were waiting for the company to tune down its annual growth outlook due to weakening consumer sentiment on consumer electronic products. Counterpoint projects the global smartphone sell-through units to decline by over 10% YoY in Q1 2022, impacted by a slowing replacement cycle, geopolitical uncertainties, COVID-19 lockdowns in China and inflation concerns. Recent data on smartphone order cuts implies the risk for foundry wafer demand in the next few quarters and the previous IC shortage concerns have been improved.

Surprisingly, TSMC beat market expectations not only in its Q1 2022 financial results (with gross margin improving to 56%), but the upside of full-year sales guidance also approached 30% YoY growth. While the demand softness from smartphones has been known, TSMC believes the momentum of HPC and automotive businesses is getting stronger in 2022 and will offset the uncertainties from consumer electronics. Notably, TSMC reported $7.2-billion HPC sales in Q1 2022, exceeding the sales from smartphone clients to become the largest business of the company for the first time in history.

Other than retaining its revenue outlook for 2022, TSMC reiterated its capital spending budget at $40-$45 billion during the year, with a focus on leading-edge technology nodes (5 nm and below). The longer lead time of equipment/tool production becomes more challenging in the light of labour crunch and IC component shortages (like FPGA) from global suppliers. But TSMC has demonstrated its solid execution in ramping up new fabs as the capacity expansion plans are largely unchanged.

HPC silicon demand is on a multi-year, structural growth trajectory

The silicon demand of HPC-related ICs is well above that of the end devices and equipment. In 2022, global PC shipments are likely to decline 0%-5% YoY. The server shipments growth rate is also expected to be modest (5%-8% YoY). At the same time, 5G infrastructure growth is not accelerating in many countries, with the growth cycles of edge computing or open RAN being at the initial stages.

So, why TSMC and its HPC customers are expected to deliver a very robust growth outlook in the next 1-2 years? The answer can be found in the mega trends of digital transformation since COVID-19, which have witnessed a boost in capital spending mainly by US-based cloud service providers (CSPs) expanding their global data centre footprints. The total capex by global CSPs, based on Counterpoint estimates, may increase 23% YoY in 2022. In the three years to 2025, the annual compound growth rate (CAGR) will be in double digits. The acceleration in mega data centre buildouts is for AI services, Metaverse and autonomous driving in need of the most advanced semiconductor components. The AI accelerator IC market, which has been dominated by Nvidia, is a typical example of the market where the demand CAGR is likely to exceed 30% in the next few years as GPU, CPU, FPGA and ASIC compete for AI training and interference applications.

All main processors in server and data centres today apply foundry nodes below 10 nm. As computational performance improves significantly and demands more transistors, the roadmap of node migrations beyond 10 nm will get accelerated in the HPC semiconductor industry. In 2022, both AMD and Nvidia’s new graphic processors will move to 4 nm and 5 nm nodes. Further, we expect the next phase of 3 nm generation processors to start to ramp up after 12-18 months. Besides, the increases in larger die size in processors implies more wafer demand and higher dollar content in advanced packaging technologies that TSMC offers for complete solutions.

Counterpoint Research TSMC Sales by Application
Source: TSMC financial reports

In our view, the HPC semi demand in foundry remains the seller’s market in the next few years, as TSMC captures over 90% of market opportunities, including Intel’s CPU outsourcing orders. Competition in the HPC semi market from the global top three chipmakers – Intel, AMD and Nvidia – is intensifying by entering new areas, like Intel’s entry into the discrete GPU market and Nvidia’s plan for ARM-based server CPUs, leading to strong wafer demand in advanced nodes.

TSMC offers the leading-edge technology to enable these HPC applications to pursue the best PPAC (performance, power, area and cost) over each technology geometry. This has become TSMC’s fastest-growing business segment in the past three years from the revenue perspective. In Q1 2022, it reported HPC business sales reaching $7.2 billion with nearly 60% YoY growth, overtaking smartphones as the company’s largest segment. While TSMC did not disclose any client information, we believe AMD, Nvidia, Broadcom, Marvell and Intel were the major traditional HPC customers during the quarter, with Apple as the top-selling one due to its Apple Silicon (M series) in PCs and tablets.

5/4 nm is the mainstream today, 3 nm to ramp up from 2023

The reason why TSMC’s revenue is increasing from the HPC segment is that the majority of wafers in HPC applications apply the leading-edge nodes (from 7 nm and 6 nm to 5 nm and 4 nm in 2022). Wafer prices at these nodes are multiple times higher than the foundry industry ASPs due to more expensive equipment tools. During Q1 2022, the mainstream of HPC ICs was at 7/6-nm, including discrete GPUs, data centre GPUs (AI accelerators), x86 CPUs, ARM CPUs for client devices (tablets and laptops) and specific processors like crypto mining ASICs. TSMC will also start to ramp up multiple new CPUs/GPUs at 5/4 nm in H1 2022, leading to its robust wafer demand likely through the end of the year.

Based on our estimates, in 5/4-nm nodes, the total wafer demand from HPC products (see Exhibit 2) will account for 37% of the total foundry (excluding IDM) industry capacity in 2022. Smartphone AP/SoCs will remain the largest portion of wafer demand (over 50%) in this node during the year. With new product cycles from Nvidia and AMD in H2 2022, more wafers will be procured into 2023 as HPC might reach half of the total wafer capacity at 5/4 nm in the next year.

Counterpoint Research HPC Wafer Demand

During its Q1 2022 financial result conference, TSMC reiterated 3 nm would enter mass production in H2 2022, with wafer sales contribution from the beginning of 2023. As we all know that the new iPhone application processor (A16) will adopt 4 nm instead of 3 nm due to initial supply constraints from TSMC, HPC products will be the main body of 3 nm in H1 2023, especially the demand from Intel’s wafer outsourcing in its new CPU line-ups. We believe Intel would be the second-largest client after Apple on TSMC’s 3 nm in 2023 as the volume of outsourced wafer orders is highly subject to Intel’s in-house EUV availability in the early stage. HPC applications will be a stable part (Exhibit 3) in 3 nm with 40%-60% of total foundry wafer demand during 2023-2025.


The crossover point between HPC and smartphone sales at TSMC, observed in Q1 2022, is more like the beginning of the future trend where semiconductors will shift growth drivers from mobile devices to multiple computing focus areas for the next wave of technology applications. We estimate TSMC’s HPC segment to account for 42% of its total revenue in 2022, including wafer and 2.5D/3D packaging services.

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Cloud RAN – Waiting For A Viable Business Case?

There has been a lot of interest in cloud RAN amongst established MNOs in recent months with several of the biggest MNOs planning to launch fully virtualized commercial networks over the next two years and incumbent vendors such as Nokia, Samsung and even Ericsson planning to offer a suite of fully virtualized cloud RAN products.

Benefits of Cloud RAN

A virtualized and disaggregated cloud RAN network will enable MNOs to fully leverage the benefits of a 5G cloud-native architecture, which include scalability, network agility and automation, features essential to enable new services such as low-latency MEC services, massive IoT, etc. However, there are many challenges to overcome before MNOs start reaping these benefits. These include include a lack of fronthaul fiber capacity, performance issues, vendor lock-in concerns, network integration challenges plus an immature ecosystem.

An Emerging Ecosystem

The cloud RAN ecosystem is an ecosystem under development and it will take several years for it to mature and to offer a full range of products. Although a plethora of new telco-grade COTS servers have been announced by server vendors in recent months, a lot of the key technologies are still under development. For example, the market for hardware acceleration and network connectivity is still in its infancy. Counterpoint Research believes that a range of acceleration card options – both look-aside and in-line – and based on FPGAs, GPUs or ASICs/eASICS. will be required.  In addition, network interface cards able to meet stringent timing and synchronization specifications are required for fronthaul connectivity. Ideally, these PCIe-based cards will need to be multi-function incorporating both network connectivity and hardware acceleration on a single card. No such cards exist today.

Vendor Lock-In

All cloud RAN deployments to date are based on COTS servers using Intel’s FlexRAN architecture with or without hardware acceleration. In fact, Intel’s FlexRAN is almost the only cloud RAN chip reference architecture available commercially today. However, there are numerous alternative platforms being developed by competitors. These include ARM-based alternatives from vendors such as Marvell and Broadcom, GPU-based designs from Nvidia as well as a few RISC-V-based possibilities from start-ups such as EdgeQ and Picocom. Counterpoint Research believes that the widespread commercial availability of these alternative merchant silicon designs will be critical to commercial development of the cloud RAN market.

Incumbent Versus Open Cloud RAN

Compared to their European brethren, major MNOs in the US seem less obsessed about swapping radios and basebands and are adopting a different strategy with respect to cloud RAN. While all major US MNOs agree that open RAN will be the future, in the short-term, they believe that the best way of benefiting from open RAN is to leverage its intelligent RAN capabilities, an inherent part of the O-RAN Alliance architecture, via the RAN Intelligent Controller (RIC) design. As a result, Counterpoint Research believes that most US MNOs will rely on cloud RAN solutions from their existing incumbent suppliers such as Ericsson, Nokia or Samsung, thereby avoiding the complexities of integrating open, multi-vendor networks.

Economics and Business Case

For established operators, the feasibility of deploying cloud RAN largely depends on three factors: the availability of cheap fiber, real estate sites (to accommodate data centers) plus a viable business case. Inevitably, this will vary from operator to operator and from country to country. Legacy telcos in countries with good fiber access such as Japan and South Korea who are able to adapt existing central office sites to accommodate cloud RAN servers are potentially at an advantage here. However, even for them the business case is not clear cut. At this time, the potential cost savings of centralizing and cloudifying the RAN remain largely unproven and hence Counterpoint Research doubts that the business case for deploying cloud RAN stacks up. Combining cloud RAN with MEC-type enterprise services may be a better bet although the MEC market itself is also a nascent and unproven market.

Cloud RAN Deployments

With China unlikely to go down the disaggregated route any time soon, Counterpoint Research believes that the options for large scale cloud RAN deployments seem limited in the short and medium term. And after spending billions of dollars, MNOs elsewhere are unlikely to rip out and replace existing 5G infrastructure. One opportunity though could be the US market with the deployment of new 5G networks in C-band starting in 2022. However, even here cloud RAN will probably be limited to a few small-scale commercial deployments (essentially trials) for the foreseeable future – at least until the ecosystem matures and the business case becomes clearer. In the meantime, big MNOs such as AT&T, NTT DoCoMo and Verizon (plus a few vendors) will continue striving to gain the upper hand in the all important PR game!

Related Reports:

Rakuten’s Future – Operator, Vendor or Something Else?

Open RAN Radios – Chinese Vendors to Dominate New Market?

Open RAN Cheerleader Plays Safe with Incumbent Vendors


RISC-V Adoption Picks Up Pace

IP design around the chipset architecture, security and cutting-edge performance improvements matching the advancements in manufacturing process and material science have been the key to semiconductor supply chain. Intel has been dominating the CPU architecture for the computing market with its x86 instruction set but integrated mostly into its own chips. However, Arm with its “pure play” licensing of its cutting-edge chipset architecture revolutionized the smartphone market, which became the fastest growing and high-scale personal computing segment in the world.

However, the semiconductor industry over the recent years has seen significant shifts, from consolidation to power acquisition moves, which has exacerbated the geopolitical tensions between key economies with semiconductors becoming the key component of the “technology cold war”. Sanctions on Huawei, NVIDIA looking to acquire Arm and China’s domestic semiconductor ambitions have warranted the need to find alternative semiconductor IP providers and reshape the global semiconductor supply chain.

RISC-V ISA is probably the candidate in the spotlight leveraging an open-source architecture. But the key question is how RISC-V is aligned in terms of capabilities, potential opportunities, and adoption rates.

In this report, we will deep-dive into the global semiconductor IP landscape and find how the introduction of RISC-V ISA can compete with tech giants such as Intel and Qualcomm, and pure play providers such as Arm and Synopsys.

To receive your free copy of the report, please get in touch  – info(at)

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