2024 is a record year for the semiconductor market, with Omdia data showing that revenue in 2024 will surge by about 25% to $683 billion. The sharp growth is attributed to strong demand for AI-related chips, especially high-bandwidth memory (HBM) used in AI GPUs, which has led to an annual growth rate of 74% in the memory sector. After a challenging 2023, the rebound in memory has helped boost the overall market. However, the record year masked an uneven performance across the industry. The data processing sector grew strongly, while other key sectors such as automotive, consumer and industrial semiconductors saw revenue declines in 2024. These struggles highlighted weak links in an otherwise booming market. AI and memory set for a strong 2024 AI-powered financial toolsThe impact of AI on the semiconductor market has been dominant throughout 2024, driving record revenues and reshaping industry dynamics. Nvidia has emerged as the undisputed leader, with strong revenue growth and rising market share over the past few years thanks to its AI GPUs. As an important component of AI applications, HBM sales have also surged, significantly boosting the revenues of memory companies. Although HBM's growth rate has exceeded that of other DRAM segments, the improvement in supply and demand balance has also contributed to higher average selling prices (ASPs) and revenue growth for the entire memory market. Industrial sector faces second consecutive year of decline The decline in the industrial semiconductor sector begins in 2023 and deepens in 2024, creating challenges for companies focused on this sector. "Historically, the industrial semiconductor market has grown by about 6% per year, however, after two years of above-average growth in 2021 and 2022, semiconductor market revenues fell by double digits in 2024," said Cliff Leimbach, principal analyst at Omdia. "Lower demand coupled with inventory adjustments make 2024 a difficult year for the industrial sector. Companies with a large presence in this sector have also seen their market share rankings fall as a result." The automotive market is stagnant While the automotive semiconductor market performs better than the industrial sector, it also experiences a revenue decline in 2024. The automotive semiconductor market nearly doubled in size from 2020 to 2023, far exceeding the historical average annual growth rate of 10%. Weak demand leads to a contraction in 2024, breaking the market's steady upward trajectory in recent years. Nvidia tops the list, market rankings change Nvidia's dominance in artificial intelligence-driven GPUs has vaulted it to the top of a ranking of semiconductor companies by revenue, overtaking Samsung, which was ranked first in 2023. The strong memory market also reshaped the rankings, with Samsung, SK Hynix and Micron all among the seven largest semiconductor companies by revenue. Each of these companies moved up at least one position compared to the 2023 rankings, marking a significant change from the previous year's rankings, when these companies were spread across the top eleven. |
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