AI, Auto Demand to Supercharge Chip Rebound in 2024

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The global frenzy for artificial intelligence (AI) chips, and a steady rise in automotive chips, will propel a rebound in global semiconductor sales this year, according to an industry group’s annual sales data released on Monday.

The Semiconductor Industry Association (SIA) forecast a 13.1% jump in global chip sales to $595.3 billion, compared with a drop of about 8% in sales in 2023.

“AI is a super strong market – I think of you look across the landscape, there’s a lot of positive things to look at,” SIA Chief Executive John Neuffer told Reuters in an interview.

Despite a slow start to the year for auto chips, that slice of the chip market is still expected to grow 6%, according to SIA Director, Industry Statistics and Economic Policy Robert Casanova.

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Last year, weak demand for PCs and smartphones punished chipmakers like Intel and Qualcomm, partially contributing to a 1.1% increase in sales of so-called “logic” chips to $178.5 billion. Memory sales plunged 29% to $92.3 billion and was the second largest category tracked by the SIA.

But this year, the frenzy among tech giants to deliver products and services that deploy AI triggered a surge in demand for the advanced chips produced by Nvidia, as cloud computing companies seek to build more capacity to run such software.

AI applications require large quantities of graphics processing units (GPUs) strung together, and a range of other types of chips around them to achieve the performance necessary. AI systems need massive amounts of high-bandwidth memory made by SK Hynix and speedy networking processors to move data between.

Reuters with additional editing by Sean O’Meara

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Sean O’Meara

Sean O’Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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