Socionext Threads North America's Data Center

Socionext Inc. has revealed that its data center business negotiations in North America are in full swing. Socionext believes that its artificial intelligence (AI) technology, which generates human-like sentences, and large-scale language models (LLM) have opened the door to the growing market. The company hopes to capture more business in the future.

During an online press conference, Masahiro Koezuka, President of Socionext, gave an update on the business negotiations. He acknowledged the positive response to the data center business negotiations in North America. He said that although a legally binding contract has not yet been signed, full-fledged business negotiations are progressing. Specifically, the negotiations include 3-nanometer products, which could contribute to the company’s performance in 2026-2027.


Prioritize Entry as Front End Designer

Data center companies, known as hyperscalers, own more than 1 million servers. Hyperscalers tend to produce in-house the front end, such as system design, and outsource the back end, such as physical design.

During the Q&A session, some people asked about Socionext’s role in this setup. Koezuka answered that he expects to be in charge of both at this time. He noted that while competing with leading companies in Taiwan and North America, Socionext will prioritize entry into the market in the front end, even if it means low-margin negotiations. The company hopes to enter the same virtuous circle in the data center as it did in the automotive field.

Mainly, the company’s strength lies in its design capabilities, including front-end design. However, it has not ruled out development of the back end as it seeks to win other business opportunities in data centers.

Also, Koezuka stated that the impact of AI will spread not only to data centers but also to automobiles and industrial machinery. Moreover, demand for heterogeneous integration will increase. In heterogenous integration, multiple chips with different functions are integrated into a single package. Amid all these developments, Socionext’s technology will handle the complex designs.

For FY ending March 31, 2025, the company targets 250 billion yen in business wins, the same as in the previous fiscal year. Further, it intends to increase the amount.

This is an English translation of an original Japanese article published in Dempa Shimbun Daily.

-08 May 2024-