For years, Tencent Games, a division of China’s largest internet company, had taken the lion’s share of revenue in the global gaming market with blockbuster titles such as “League of Legends” and “PUBG: Battlegrounds.” These games defined the game genres that they belonged to with unique, innovative gameplays, and Tencent Games was able to seek out and partner with the creators behind these games because of successful execution of its investment strategy. But the competitive landscape of the gaming industry had changed, and the company was at a crossroads deciding whether to pursue an opportunity in a new, unproven game genre.
The semiconductor industry powers modern technology, from consumer electronics to data centers. This background note explores the layers of the semiconductor inudstry value chain, including Integrated Device Manufacturers (IDMs), fabless companies, and foundries, while detailing the critical role of chip design, manufacturing, and market dynamics in the global supply chain.
This case study examines Nvidia's strategic pivot from gaming GPUs to becoming a leader in general-purpose computing and AI. It explores how Nvidia leveraged its GPU architecture to dominate the growing fields of data center acceleration and AI training, outpacing competitors. Key themes include the evolution of Nvidia’s product lines, its ecosystem-driven strategy (CUDA), and the company’s role in advancing AI technologies across industries. This transition has positioned Nvidia as a critical player in the future of AI-driven computing, reshaping both the company and the broader semiconductor landscape.
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