Semiconductor Revenues Surge by 18% in 2024, Samsung Reclaims Top Position

Surge in Semiconductor Market Driven by AI Demand

The semiconductor industry experienced significant growth last year, with revenue climbing by an impressive 18.1% to reach $626 billion. This upward trajectory is expected to continue, with projections indicating a further increase to $705 billion by 2025, fueled primarily by the burgeoning need for graphics cards and neural processing units to support artificial intelligence (AI) technologies.

Shifts in Market Leadership

The revenue growth has prompted notable shifts in the rankings among semiconductor vendors. Of the top 25 companies, 11 displayed double-digit growth, while only eight saw declines. Notably, Samsung surpassed Intel to claim the top spot, while Nvidia surged from fifth to third place. Additionally, Micron Technology achieved the most significant improvement, climbing from the 12th position to sixth.

Decline of Major Players

In contrast, major industry players such as Intel, Qualcomm, Broadcom, AMD, and Apple all experienced a drop in their rankings in 2024 compared to the previous year.

Data Center Demand Drives Growth

According to George Brocklehurst, VP Analyst at Gartner, the primary catalysts for the chip sector’s success in 2024 were graphics processing units (GPUs) and AI processors utilized in data centers. The surging demand for AI and generative AI (GenAI) applications positioned data centers as the second-largest semiconductor market in 2024, trailing only smartphones. Revenue from data center semiconductors skyrocketed to $112 billion, up from $64.8 billion in 2023.

Looking ahead, memory and AI semiconductors are projected to drive near-term growth, with high-bandwidth memory (HBM) expected to capture an increasing percentage of overall DRAM revenue—estimated to reach 19.2% by 2025. Moreover, HBM revenue is forecasted to soar by 66.3% to hit $19.8 billion by the same year.

Future Trends and Developments

The evolution of reasoning models, such as those emerging from DeepSeek R1, may further influence market dynamics by increasing power demands. However, it’s also possible that advancements in model efficiency may temper this demand, making the future landscape of the semiconductor industry particularly fascinating to observe.

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