By Kate Yuan
China's central government launched recently the “east-to-west computing resource transfer project,” designed to boost more balanced computing power across the country in extended digital economy. The project is leading to a surge in demand for domestic XPU chips, including CPUs, GPUs and DPUs, according to a JW Insights analyst article.
The project announced in February decided to construct eight computing hubs to improve the overall computing power and resource efficiency. Their locations cover the country's economic powerhouses in the eastern China from the Pearl River Delta, Yangtze River Delta, and Beijing-Hebei-Tianjin Area to the less developed yet resource-rich western China regions including Chengdu-Chongqing Area, Inner Mongolia, Guizhou, Gansu and Ningxia. The project will also include ten national data center clusters, enhancing the integrated development of regional economies.
The move comes amid a surge of demand for computing capacity as the country rides the digitalization wave, but shortages of energy and land resources have limited the expansion of data centers in the more developed regions. The western region has abundant resources to develop data centers to meet the computing power needs of the eastern region.
This project will be able to optimize the layout of data centers by building a new computing power network system that integrates data centers, cloud computing, and big data.
It is an important step in China’s way to a digital economy. Every step from data generation to data transmission, calculation, and processing relies on computing chips. The surging data processing volume driven by the project may stimulate the demand for high-performance computing chips such as CPUs, GPUs and DPUs.
CPU-based chips can provide basic computing power, which includes cloud computing and edge computing.
GPU is like CPU in physical structure, including control unit, storage unit and arithmetic unit. CPU is good at logic control and serial calculation, while GPU has more ALU, suitable for parallel processing of large-scale data.
According to market research firm IDC, GPUs held 91.9% of AI server accelerators in 2021, NPUs 6.3%, ASICs 1.5%, and FPGAs 0.3%.
The IDC data also shows that China's GPU market was $2.6 billion in 2020, and will hit $6.4 billion in 2024, with a compound growth rate of 30%. Driven by market demand, hot money is rapidly pouring into the GPU industry, boosting the further development of domestic GPU enterprises.
Chinese GPU companies have completed several rounds of large-scale financing just in the first three months of this year, including Lisuan Technology (砺算科技), Xintong Semiconductor (芯瞳半导体), and Siroywe (深流微智能).
DPU is a data processor which assists the CPU to process network, storage and computing, and provides the computing engine for high-bandwidth, low-latency, and data-intensive computing scenarios. It is expected to become the third pillar chip supporting the computing power after CPU and GPU.
Several Chinese DPU start-ups have emerged, favored by financial investors thanks to the increasing computing power growth potential.
In March, Corigine (芯启源) received a strategic investment of over RMB100 million ($15.7 million) for the R&D of next-generation DPU products. YUSUR Technology (中科驭数), and Resnics (益思芯科技) have also received financing last year.
Analysts say the launch of the “east-to-west computing resource transfer project” indicates that China has entered a new era of computing power and the chips required for these functions have become the industry’s new focus.
In February, China’s largest telecom operator China Mobile released its PC server procurement data. Huawei’s Kunpeng accounted for 16.55%, and Hygon took up 10.49%.
China Telecom opened the bid recently for 2022-2023 server procurement in one of the largest scale among China’s three major operators. The domestic CPUs account for 27%.
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