Meta (META.US) self-developed AI chip "Iris" will officially start production in September, and computing power will double to 14 gigawatts next year.

According to reports, Meta Platforms (META.US) plans to start mass producing its self-developed artificial intelligence chip (code-named "Iris") from September this year to further enhance its computing capabilities. After the news was announced, Meta's stock price fell by 3.6%. According to internal memos, the company led by Mark Zuckerberg is aiming to increase its computing power to 14 gigawatts next year, compared to around 7 gigawatts this year. Meta is partnering with Broadcom Inc. (AVGO.US) for chip design, and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) for manufacturing. The memo also states that the testing of the chip only takes about six weeks, with no major technical issues found. Iris is a data center AI chip tailored to Meta's own business needs, and is part of Meta's self-developed MTIA (Meta Training and Inference Accelerators) fourth-generation project. The chip is designed by Meta itself, with Broadcom Inc. (AVGO) participating in joint design, and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM) handling manufacturing. The MTIA chip was first launched in 2023, and the company previously stated that they will develop at least four generations of products. Iris was officially released in March this year, and Meta plans to introduce a new model approximately every six months in the future. Iris is not positioned to completely replace GPU, but rather to complement the AI GPUs purchased in bulk from NVIDIA Corporation and AMD, in supporting AI training and inference tasks. Meta hopes to reduce the high costs of purchasing AI computing power and reduce dependence on external chip suppliers like NVIDIA Corporation and AMD through self-developed custom chips. The internal memo bluntly states that for a company of Meta's scale, "deploying the latest generation GPU is extremely difficult and time-consuming." Meta has been laying out self-developed AI chips for over five years, but the MTIA project has not progressed smoothly before, with multiple route adjustments and being seen as a typical case of slow progress in self-developed chips for large internet companies. The turning point came in March this year, when Meta first announced Iris and three other AI processors. The information revealed in this internal memo is crucial: Iris chip completed defect testing in just six weeks, with no major issues found. For data center-level AI chips, post-silicon validation typically takes several months, and any major bugs could lead to redesign or re-silicon. Completing testing in six weeks means that Meta's chip development system is gradually maturing, clearing critical obstacles for mass production in September. So far, Meta has mainly relied on external suppliers such as NVIDIA Corporation (NVDA.US) and AMD (AMD.US) for computing power. The memo also points out that Meta has signed a long-term memory chip supply agreement with Samsung (SSNLF), reached a flash memory purchase agreement with SanDisk (SNDK.US), and established cooperation with Sumitomo Electric for fiber optic needs. It is worth noting that on the same day, Meta announced that it will invest approximately $10 billion to build its first data center in Canada to expand its infrastructure in support of its ambitions in the field of artificial intelligence. The data center will be located in Sturgeon County, Alberta, with a power capacity of 1 gigawatt, equivalent to the electricity consumption of about 750,000 households, primarily relying on natural gas for power generation. Meta stated that the company is providing funding for this new power facility, which will be connected to Alberta's power grid. In a statement on Wednesday, Meta stated that the facility will require 3,000 construction workers during construction and will create 300 full-time job positions once completed. According to Gary DeMasi, Vice President of Data Center Development and Strategy at Meta, the data center will be the largest one outside of the United States for Meta.