AI and Automotive Sectors to Drive a 13% Surge in Global Chip Sales in 2024

the global semiconductor market is poised for a significant recovery in 2024, fueled by robust demand in artificial intelligence (AI) applications and steady growth in the automotive chip sector. The Semiconductor Industry Association (SIA) predicts a notable 13.1% increase in global chip sales, soaring to $595.3 billion, in stark contrast to the approximate 8% dip experienced in 2023.

John Neuffer, SIA Chief Executive, expressed optimism about the market, particularly highlighting the burgeoning AI sector as a “super strong market” with numerous positive dynamics in play. Despite a sluggish start in the auto chip segment, it’s projected to witness a 6% growth, as per Robert Casanova, SIA’s Director of Industry Statistics and Economic Policy.

The downturn in 2023 was partly due to decreased demand for PCs and smartphones, impacting chip manufacturers such as Intel and Qualcomm. This led to a modest 1.1% rise in sales of “logic” chips, totaling $178.5 billion, and a steep 29% drop in memory sales, plummeting to $92.3 billion.

However, 2024 is shaping up differently, thanks in large part to the AI-driven frenzy amongst tech giants eager to unveil products and services powered by advanced AI. This trend is driving a significant demand spike for high-performance chips, like those produced by Nvidia, as cloud computing entities rush to expand their capabilities to support sophisticated AI software.

AI systems require extensive arrays of graphics processing units (GPUs) and various other chip types to deliver the needed performance. These systems demand high-bandwidth memory, such as that provided by SK Hynix, and rapid networking processors for efficient data transfer, setting the stage for a vibrant and demanding semiconductor market in 2024.