The global Artificial Intelligence (AI) chips market is projected to experience robust growth in the coming years. According to the latest report from MarketsandMarkets, the sector, valued at $123.16 billion in 2024, is set to reach $311.58 billion by 2029, with a Compound Annual Growth Rate (CAGR) of 20.4%.
This significant increase in the demand for AI chips is being driven by the growing adoption of AI servers by hyperscalers, private cloud infrastructure providers, and the rise of generative AI technologies and applications, such as GenAI and AIoT. These technologies are transforming various industries, including financial services, healthcare, retail and e-commerce, and media and entertainment.
Growth Drivers
The increase in the implementation of AI servers in diverse applications is one of the main drivers of this growth. Data center owners and cloud service providers are modernizing their infrastructure to support AI-based applications, which in turn is fueling the demand for high-performance chips that can efficiently handle AI workloads in cloud data centers.
Challenges in the Supply Chain
However, the market faces significant challenges, especially when it comes to disruptions in the supply chain. These disruptions impact the volume of production, delivery time, and ultimately the cost of processors. Component shortages, stemming from insufficient semiconductor materials or limited production capacity, lead to production delays. These delays can also arise due to equipment failures or the complexity of processing advanced AI chips.
Key Market Players
Among the leading AI chip providers are NVIDIA Corporation, Advanced Micro Devices, Inc., Intel Corporation, Micron Technology, Inc., Google, SK HYNIX INC., Qualcomm Technologies, Inc., Samsung, Huawei Technologies Co., Ltd., Apple Inc., Imagination Technologies, Graphcore, and Cerebras. In addition, startups like Mythic, Kalray, Blaize, Groq, HAILO TECHNOLOGIES LTD, GreenWaves Technologies, SiMa Technologies, Kneron, Rain Neuromorphics Inc., Tenstorrent, SambaNova Systems, Inc., Taalas, SAPEON Inc., Rebellions Inc., Rivos Inc., and Shanghai BiRen Technology Co., Ltd., are making their presence felt in the market.
The growth projection and current challenges underscore the importance of continuous innovation and adaptation in the AI chip sector, a field that continues to expand rapidly with the advancement of emerging technologies.