"NVIDIA's Entry into the Telecommunications Market Benefits Wireless Equipment Firms" [Weekend Money]

NVIDIA's Entry into AI Base Stations

Beneficiaries Include Domestic Outsourcing Equipment Firms

"Focus on KMW, RFHIC, HFR, and LIG Acube"

As NVIDIA is pushing to enter the artificial intelligence (AI) base station business, analysts believe this could present an opportunity for domestic outsourcing equipment companies.

Hong-Sik Kim, a researcher at Hana Securities, stated in a recent report titled "NVIDIA's Entry into the Telecommunications Market Is a Significant Opportunity" that "the expansion of the AI base station market by NVIDIA creates a high likelihood for domestic outsourcing equipment companies to capitalize on market growth."

According to Kim, NVIDIA is expanding its business scope from AI data centers to AI base stations (AI RAN). The company is seeking to move into the radio unit (RU) domain following its distributed unit (DU) business, and its strategy is to directly integrate graphics processing units (GPUs) into base stations. Since sending and receiving data to and from data centers causes latency, NVIDIA aims to provide edge computing-based AI inference capabilities that allow immediate data processing near the field.

As a result, some investors are concerned that, based on NVIDIA’s dominance over key components and platforms in the base station market, the position of existing telecommunications equipment companies will weaken and the market could be eroded. However, Kim counters that this is likely to work in favor of domestic telecommunications equipment companies, as it can act as a positive factor by expanding the overall market size.

First, domestic small and medium-sized outsourcing equipment companies are mainly focused on the RU component, fronthaul, and in-building equipment sectors, which do not directly overlap with the areas NVIDIA is concentrating on—meaning there is a real opportunity. This development is also expected to resolve the market's skepticism over additional 5G·6G investments. The construction of AI base stations and commercialization of physical AI will provide justification for investment, which in turn is likely to encourage regulatory authorities in various countries to promote further spending.

Kim emphasized, "As NVIDIA fully dives into the AI base station business, physical AI will likely become a catalyst for the adoption of 5G SA, making this a critical development to watch." He added, "We recommend greater attention first be paid to wireless telecommunications equipment firms such as KMW, RFHIC, HFR, and LIG NEX1 subsidiary Acube."

This content was produced with the assistance of AI translation services.