A recent report by Allied Market Research titled “Artificial Intelligence Chip Market” predicts substantial growth in the global artificial intelligence chip market. In 2022, the market was valued at US$14.9 billion, and it is projected to reach an impressive US$383.7 billion by 2032, with a compound annual growth rate (CAGR) of 38.2 percent from 2023 to 2032.
Artificial intelligence chips play a crucial role across various industries and applications. These chips encompass AI specialized graphics processing units (GPUs), application-specific integrated circuits (ASICs), and field-programmable gate arrays (FPGAs), which are significantly faster and more efficient than general-purpose CPUs.
Key Growth Drivers:
Demand for Smart Homes and Smart Cities: The rise in demand for smart homes and smart cities is expected to boost the AI chip market. These technologies require advanced AI capabilities for efficient operations.
Investment in AI Startups: Increasing investments in AI startups are driving innovation and development in the AI chip sector, leading to market growth.
Emergence of Quantum Computing: Quantum computing is gaining prominence, and AI chips are crucial for its advancement, contributing to the market’s expansion.
Adoption in Developing Economies: Developing economies are increasingly adopting AI chips, contributing to market growth potential.
Challenges: One of the main challenges facing the AI chip market is the shortage of a skilled workforce. Additionally, the COVID-19 pandemic had a significant impact on the industry, leading to temporary shutdowns of manufacturing units and an increase in the prices of semiconductor components due to supply shortages.
COVID-19 Impact: During the pandemic, major players in the AI chip market made moderate R&D cuts but maintained a focus on innovation and product portfolio enhancement.
Market Segmentation
CPU Segment: The CPU segment accounted for the highest market share in 2022, contributing to more than one-third of the global AI chip market revenue. It is expected to maintain its leadership status due to its ability to handle sequential code and its fusion with FPGA, offering growth opportunities.
Edge Segment: In 2022, the edge segment held the highest market share, representing over three-fifths of the global AI chip market revenue. Advancements in technology and increasing demand for AI systems in healthcare and BFSI verticals drove this dominance. The edge segment is expected to maintain its leadership status and exhibit the highest CAGR of 40.3 percent from 2023 to 2032.
Healthcare Segment: The healthcare sector held the highest market share in 2022, accounting for nearly one-fifth of the market revenue. It is used for diagnosis, treatment, disease management, clinical trials, wellness, and reimbursement. The “others” segment is projected to witness the highest CAGR of 44.2% from 2023 to 2032, with applications expanding across agriculture, law, and educational institutions.
Regional Outlook
North America: In 2022, North America dominated the market, contributing to more than one-third of the global AI chip market revenue.
Asia-Pacific: The Asia-Pacific region is expected to witness the fastest CAGR of 42.1 percent from 2023 to 2032. Advancements in algorithmic software systems and widespread adoption of AI technologies, particularly in finance and healthcare sectors, contribute to this growth.
Key Market Players: Several major players operate in the AI chip market, including Qualcomm Technologies Inc., Baidu, MediaTek Inc., NVIDIA Corporation (Mellanox Technologies), Alphabet Inc., Mythic, NXP Semiconductors, Intel Corporation, Samsung Electronics Co Ltd, Advanced Micro Devices Inc. (Xilinx Inc.), and SoftBank Corp.
These players have adopted various strategies such as acquisitions, branding, new product launches, collaborations, and more to increase their market share and maintain dominance in different regions.
In conclusion, the AI chip market is poised for significant growth, driven by various factors such as the demand for smart technologies, investment in AI startups, and the emergence of quantum computing. While challenges exist, the market’s potential for expansion remains substantial.
