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At the end of August, the world’s attention was drawn to the earnings announcement of US semiconductor giant NVIDIA. Around the same time, there were new announcements regarding the domestic semiconductor industry in Japan. In this article, we will introduce these two topics.

1. NVIDIA’s Q2 Earnings Announcement

NVIDIA, a global leader in AI semiconductors, announced its earnings for the second quarter (April-June) on August 28th, reporting record-high revenue and net income.

Revenue surged 2.2 times year-on-year to $30.04 billion. In particular, the data center segment, which houses most of its AI products, generated $26.272 billion, accounting for 87% of the total.

The importance of data centers has increased significantly with the advent of generative AI. It is said that generative AI requires 10 times more power than a typical search to answer user queries. Additionally, data centers consume a vast amount of electricity by performing calculations on massive amounts of data using numerous servers in a short period.

NVIDIA plans to start mass production of its AI-dedicated GPU, “Blackwell,” later this year.

Although production delays have been reported, it is said that generative AI will become 30 times faster and 25 times more energy-efficient.

Once the shipment of Blackwell begins in earnest, interest in data centers is likely to further increase.

2. Expectations for Preferred Networks (PFN), Developing Domestic Semiconductors (for Generative AI)

SBI Holdings, a major internet financial company, announced a capital and business alliance with Preferred Networks (PFN), a startup that provides AI services.

The two companies will jointly develop AI semiconductors by incorporating PFN’s AI semiconductor design know-how.

Founded in 2014, PFN is a startup that vertically integrates the development and provision of hardware and software necessary for the practical application of AI technology. The company handles everything from the design of AI semiconductors and development of peripheral software to the development of supercomputers using its own AI semiconductors, construction of generative AI foundation models, and development of applications that utilize them. Since 2023, it has been providing computational platforms using its own AI semiconductors to external users.

Recently, the global demand for AI semiconductors has been rapidly increasing due to the advancement of generative AI technology, leading to a supply shortage. Furthermore, it is expected that power consumption from AI development and utilization will continue to increase, necessitating the development of high-performance and low-power consumption AI semiconductors.

Through this collaboration with PFN, the SBI Group expresses its enthusiasm in strongly supporting the domestic dissemination of next-generation AI semiconductors and promoting PFN’s business expansion, thereby contributing to the development of the semiconductor industry in Japan.

Additionally, by manufacturing PFN’s next-generation AI semiconductors, the SBI Group expects to increase its recognition in the manufacturing industry and create a semiconductor ecosystem in Miyagi Prefecture, where its planned business site is located, leading to high economic effects within the region. This, the company believes, will enable a significant increase in the added value of the SBI Group and establish a role model for industrial creation in local areas starting with the semiconductor industry.

We will continue to follow the developments of how the collaboration between the SBI Group and PFN will contribute to the revitalization of Japanese industries and the semiconductor industry.

The rapid growth of artificial intelligence (AI) has significantly increased the demand for data centers. As we’ve previously reported on data center construction projects, here are two new developments:

1. NTT Special Purpose Company to Build Data Center in Shiraoi City

NTT TEPC Data Center Special Purpose Company plans to construct a data center south of Shiraoi City Hall in Chiba Prefecture. Designed by NTT Facilities and to be constructed by Toda Construction, the project is set to begin in early April 2025 and be completed in late April 2027.

The building will be a seven-story steel structure with a total floor area of 28,623 square meters and a height of 49.20 meters. The construction site, located in Shiraoi City’s Fukuji Daisan district, covers an additional 32,901 square meters. Towasogo Systems is involved as a consultant.

Initially, Tokyo Electric Power Group’s TEPCO Real Estate planned to build a data center, the “Shiraoi DC Project,” on this site. However, NTT Data Group’s NTT Global Data Centers and Tokyo Electric Power Group’s Tokyo Electric Power Grid announced in December 2023 that they would establish a new company to jointly develop and operate data centers in the Chiba Prefecture’s Inzai-Shirai area. In February of this year, they established NTT TEPC Data Center Special Purpose Company.

On March 15 of the same year, ownership was transferred from TEPCO Real Estate to NTT TEPC Data Center Special Purpose Company.

Shiraoi City is adjacent to Inzai City, where numerous data centers have already been built. It remains to be seen whether this area will continue to expand as a data center hub.

2. ESR to Build Data Center in Redevelopment of Osaka University Minoh Campus

ESR has announced that it will begin dismantling existing facilities as early as 2024 for its “Osaka University Minoh Campus Redevelopment Project” in Minoh City, Osaka Prefecture. The project plans to develop a data center, schools, and other facilities, with construction work scheduled to be completed by 2026.

The company aims to begin construction of each facility in the same year and open them sequentially from 2027, with the school opening and partial operation of the data center scheduled for 2028.

Prior to the start of the project, Minoh City compiled a draft district plan for the project site. After a public comment period, a decision on the urban planning change is expected around November.

The facility introduction district will be developed as a data center, and the international education district will be home to an international school. Additionally, the project site will include stores, community facilities, and pedestrian walkways. Approximately 3,600 square meters will be allocated to parks, and a 12-meter-wide, 840-meter-long sectioned road will be constructed.

Previously, we reported on the construction of a data center on a former factory site. ESR’s plan, which involves redeveloping the former Osaka University Minoh Campus, suggests that the extensive land area and readily available power supply may have been factors in choosing to build a data center.

Moreover, this project involves urban planning that includes a data center, making it interesting to see how the details of facilities such as schools and stores will unfold.