AI Boom Propels Semiconductor Industry to New Heights in 2024

Intel knocked off top spot in global chip revenue rankings

Missed the AI processor boat, split with CEO savior, lost #1 seat to Samsung Eight out of the top ten semiconductor vendors recorded healthy revenue growth last year, fueled by burgeoning GPU and AI processor sales to datacenter customers. Intel and Infineon were the notable exceptions. This is according to Gartner's estimations for the worldwide semiconductor market, which adds more weight to the sense that 2024 was an annus horribilis for Chipzilla. The Santa Clara-based chipmaker was pushed into second spot in the global sales rankings behind Samsung, and has SK hynix and Nvidia coming up fast behind it. "Graphics processing units (GPUs) and AI processors used in datacenter applications (servers and accelerator cards) were the key drivers for the chip sector in 2024," said Gartner VP analyst George Brocklehurst. "The rising demand for AI and generative AI (GenAI) workloads led datacenters to become the second-largest market for semiconductors in 2024, behind smartphones. Datacenter semiconductor revenue totaled $112 billion in 2024, up from $64.8 billion in 2023." Samsung was propelled to the top spot thanks to a strong rebound in memory prices. In fact, the biz recently boasted of record Q4 revenue due to increased sales of high-bandwidth memory (HBM) and high-density DDR5 for servers. For the whole of 2024, it racked up $66.5 billion in revenue, climbing 62.5 percent on the previous year, Gartner said. As for Intel, semiconductor revenue was basically flat at just 0.1 percent growth in 2024, leading to revenue of just under $49.2 billion*. Gartner attributed this to the limited success of Intel's own AI accelerators and modest growth in its core x86 business during the year. The former unstoppable champ of the chip industry has had a tough time lately as it struggles to restructure and get its silicon roadmap back on track. The past year saw it wave goodbye to chief executive Pat Gelsinger following a $16.6 billion loss in Q3, said to be the largest in the company's history. To make things worse, the chipmaker has just shelved plans to bring its next-gen GPU architecture, codenamed Falcon Shores, to market. Behind Intel is GPU maker Nvidia, which has jumped two places in the rankings thanks to its semiconductor revenue expanding by 84 percent during 2024, reaching a total of $46 billion. Memory maker SK hynix took the fourth position owing to "prolonged strong demand" for AI memory chips, and in particular the company's HBM tech used in GPU accelerators such as those produced by Nvidia, as we reported earlier this month. Infineon found itself at the bottom of the top ten. The German semiconductor biz, which makes chips for the automotive, industrial, and consumer sectors, reported revenue of $16 billion, down 6 percent from the previous year. According to Gartner, memory revenue saw a 71.8 percent revenue growth during the past year, with this category now representing a quarter of all semiconductor sales. DRAM and NAND flash revenue both increased more than 75 percent year-on-year, while HBM production "contributed significantly" to the top line of DRAM vendors that produce it. And this situation looks set to continue in 2025 as the AI bandwagon rolls on. In particular, revenue for highly prized HBM silicon is expected to leap 66.3 percent during 2025, reaching $19.8 billion. "Memory and AI semiconductors will drive near-term growth, with HBM projected to account for an increasing share of DRAM revenue, reaching 19.2 percent in 2025," Brocklehurst forecasts. ® *Eagle-eyed Reg readers will have noticed that Gartner's estimate for Intel 2024 revenue differs from the company's own figure of $53.1 billion.

AI boom fuels semiconductor growth, with 2025 set for more gains

AI Money: While shareholders and tech giants scramble to turn AI's promises into real-world business opportunities, semiconductor companies are raking in billions. Samsung has emerged as the world's top player by revenue, and the industry is poised for another strong year. Gartner recently reported that semiconductor industry revenue in 2024 reached $626 billion, marking an 18.1 percent increase from 2023. Preliminary projections suggest revenue will continue to grow, reaching up to $705 billion in 2025. Unsurprisingly, AI chips and custom accelerators accounted for the largest share of this remarkable market expansion. George Brocklehurst, VP analyst at Gartner, stated that GPUs and AI processors used in data centers, servers, and accelerator cards played a pivotal role in the semiconductor industry's growth in 2024. The rising demand for generative AI services and workloads, he confirmed, has made data center products the second-largest market segment for semiconductor manufacturers. Revenue from data center chips surged to $112 billion in 2024, up from just $64.8 billion in 2023. Despite concerns from some industry voices about an impending downturn, the so-called "AI bubble" was instrumental in propelling Samsung to the top of the semiconductor market, with total revenue reaching $66.5 billion. Intel slipped to second place, posting $49.1 billion in revenue with a modest 0.1 percent year-over-year increase in market share. Meanwhile, Nvidia performed "exceptionally well," according to Gartner, with an 84 percent revenue surge to $46 billion. The GPU designer is now the world's third-largest semiconductor vendor by revenue, as the AI boom fuels demand for accelerators and high-priced GeForce RTX cards to sustain the hype. Gartner noted that nine of the top 10 semiconductor companies achieved record results in 2024. Korean memory manufacturer SK Hynix led the industry in growth, surging 86 percent to $42.8 billion, climbing to fourth place behind Nvidia. Memory chips have become just as crucial as GPUs, with the memory market expanding by 71.8 percent in 2024. Memory chips now account for 25.2 percent of total annual semiconductor sales, Gartner reported. DRAM revenue grew by 75.4 percent, while NAND revenue rose 75.7 percent year-over-year. Analysts expect high-bandwidth memory to remain a key revenue driver in the DRAM market, with projected growth of 66.3 percent, reaching $19.8 billion in 2025.

Gartner Says Worldwide Semiconductor Revenue Grew 18% in 2024

Samsung Electronics Regained No. 1 Spot from Intel and Nvidia Climbed to 3rd PlaceSemiconductor Revenue in Data Centers Almost Doubled in 2024 to Reach $112 BillionGlobal Semiconductor Revenue Projected to Total $705 Billion in 2025 Worldwide semiconductor revenue in 2024 totaled $626 billion, an increase of 18.1% from 2024, according to preliminary results by Gartner, Inc. Revenue is projected to total $705 billion in 2025. "Graphics processing units (GPUs) and AI processors used in data center applications (servers and accelerator cards) were the key drivers for the chip sector in 2024," said George Brocklehurst, VP Analyst at Gartner. "The rising demand for AI and generative AI (GenAI) workloads led data centers to become the second-largest market for semiconductors in 2024, behind smartphones. Data center semiconductor revenue totaled $112 billion in 2024, up from $64.8 billion in 2023." The positive performance of the overall market impacted the ranking of several semiconductor vendors. Eleven vendors experienced double-digit growth and only 8 of the top 25 semiconductor vendors posted revenue decline in 2024. Samsung Electronics Regained No. 1 Spot in 2024 With 9 out of the top 10 semiconductor vendors recording revenue growth in 2024, the ranking of the top 10 semiconductor vendors changed year-over-year (see Table 1). Samsung Electronics reclaimed the No.1 spot from Intel and extended its lead over the company in 2024 driven by a strong rebound in memory device prices. Samsung Electronics revenue totaled $66.5 billion in 2024.Intel moved to the No. 2 position as its product set -- AI PCs and the Core Ultra chipset -- was insufficient to offset the limited success of its AI accelerator offering and the modest growth in its x86 business. Intel's semiconductor revenue was flat at 0.1% growth in 2024.Nvidia continued to perform exceptionally well, increasing its semiconductor revenue by 84% in 2024, to total $46 billion. It moved up two spots to secure the No. 3 position thanks to the strength of its AI business. Table 1. Top 10 Semiconductor Vendors by Revenue, Worldwide, 2024 (Millions of U.S. Dollars) 2024 Rank2023 RankVendor2024 Revenue2024 Market Share (%)2023 Revenue2024-2023 Growth (%)12Samsung Electronics66,52410.640,94262.521Intel49,1897.949,1170.135NVIDIA45,9887.325,05383.646SK hynix42,8246.823,02786.053Qualcomm32,3585.229,22510.7612Micron Technology27,8434.416,12372.774Broadcom27,6414.425,6137.987AMD23,9483.822,3077.498Apple18,8803.018,0524.6109Infineon Technologies16,0012.617,022-6.0 Others (outside top 10)274,77543.9263,4834.3 Total Market625,971100.0529,96418.1 Source: Gartner (February 2025) HBM to Represent 19.2% of DRAM Revenue in 2025, Up from 13.6% in 2024 Memory revenue recorded 71.8% revenue growth in 2024. Memory's share as a percentage of total semiconductor sales increased to 25.2% in 2024. DRAM revenue improved 75.4% in 2024 while NAND revenue increased 75.7% year-over-year. High-bandwidth memory (HBM) production contributed significantly to the revenue for DRAM vendors. HBM revenue represented 13.6% of total DRAM revenue in 2024. Nonmemory revenue increased 6.9% in 2024. Nonmemory accounted for 74.8% of total semiconductor revenue in 2024. "Memory and AI semiconductors will drive near-term growth, with HBM projected to account for an increasing share of DRAM revenue, reaching 19.2% in 2025," said Brocklehurst. "HBM revenue is estimated to increase 66.3% in 2025, reaching $19.8 billion." Gartner clients can read more in "Market Share Analysis: Semiconductors, Worldwide, 2024 (Preliminary)." About Gartner for High Tech Gartner for High Tech equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech. Follow news and updates from Gartner for High Tech on X and LinkedIn using #GartnerHT. About Gartner Gartner, Inc. (NYSE: IT) delivers actionable, objective insight that drives smarter decisions and stronger performance on an organization's mission-critical priorities. To learn more, visit gartner.com.