[Click e-Stock] "Nota Expands AI Model Compression Technology into the Semiconductor Ecosystem"

On March 13, NH Investment & Securities analyzed that Nota is expanding its business scope into on-device AI and the semiconductor ecosystem, thereby enhancing its growth potential.

Nota is accelerating customer acquisition by expanding its platform business based on AI model optimization technologies such as quantization and pruning. The company is particularly expected to see growth in platform and license revenue as it expands its customer base, especially among semiconductor companies.

Baek Joonki, a researcher at NH Investment & Securities, stated, "Nota is a company specializing in AI model compression and optimization, possessing technologies across all stages of AI model optimization, including quantization, pruning, operator optimization, and automated benchmarking. While these technologies can be utilized in cloud environments, their value will be especially prominent in on-device AI environments."

The growing size of AI models is simultaneously driving up computation costs, latency, data transmission costs, and security issues, which are all factors increasing the demand for Nota’s technology. As companies move away from cloud-centric AI and expand the use of edge and on-premises AI, the need for AI model compression technologies is on the rise.

Baek explained, "As AI models become larger, computation costs, latency, data transmission costs, and security issues are all increasing, leading companies to gradually expand the use of edge and on-premises AI."

There is also growing attention on the potential expansion of Nota’s technology into the semiconductor design ecosystem. The company is increasing its potential for collaboration with global semiconductor IP companies, and its technology may be utilized in the process of building heterogeneous AI IP architectures that combine CPUs, GPUs, and NPUs.

Baek said, "Rather than relying solely on NPU-based structures, the company is expected to participate in strategies to build heterogeneous AI IP architectures that combine CPUs, GPUs, and NPUs. As part of efforts to build an AI developer ecosystem, the company’s AI optimization technology is likely to be integrated into the upper layers of the semiconductor IP ecosystem." He added, "In this case, the expansion of its customer base and license revenue, which was anticipated at the time of the IPO, is expected to become more visible."

It is also being analyzed that cases of Nota’s technology being applied in industrial and public sectors are rapidly increasing. With new orders for its platform business also expanding, the company is seen as establishing a foundation for continued performance growth.

Baek stated, "The number of cases where the company’s technology is being applied in industrial and public sectors is increasing, and with new orders for the platform business also on the rise, the company has entered a phase of structural growth."

NH Investment & Securities forecasts that Nota will continue its performance growth this year. Annual revenue is projected to increase by 93.9% year-on-year to 25.4 billion won, although operating losses are expected to persist at 3.9 billion won. However, the company is expected to improve profitability over the mid to long term, based on the expansion of platform and license revenue.

Baek noted, "It appears that a significant portion of the overhang issue has been resolved since the IPO, resulting in low supply-side pressure. Going forward, the expansion of the customer base and an increase in platform revenue will be the key variables."

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