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The artificial intelligence (AI) chips market size is estimated to grow at a CAGR of 61.51% between 2022 and 2027. The market size is forecast to increase by USD 210,506.47 million. The growth of the market depends on several factors, including increasing adoption of AI chips in data centers, increased focus on developing AI chips for smartphones, and development of AI chips in autonomous vehicles. AI chips are used in processing units in AI applications such as autonomous vehicles, robotics, and data analysis in data centers. AI chips are integrated into applications that require hallmarks of human intelligence, such as the ability to learn, reason, and learn from past experiences. The development of AI involves applying the characteristics of human intellect in building computer algorithms.
This artificial intelligence (AI) chips market report extensively covers market segmentation by product (ASICs, GPUs, CPUs, FPGAs), end-user (media and advertising, BFSI, IT and telecommunication, automotive, and others), and geography (North America, Europe, APAC, South America, and Middle East and Africa).
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Increased focus on developing AI chips for smartphones is a key driver propelling AI chips market growth. Many smartphone OEMs are integrating dual-lens cameras, triple-lens cameras, augmented reality (AR), facial recognition, and several other innovative technologies to attract customers to upgrade their devices. The integration of these technologies requires AI chips that can process data faster. A majority of the smartphones available in the market have the above-mentioned technologies, but these applications are not efficiently supported by the processors integrated into these devices. Therefore, smartphone users are finding AI technologies a valuable addition to their devices. Therefore, smartphone OEMs have started investing heavily in the development of AI chips that offer the potential for use in the advanced technologies deployed in smartphones. These factors are going to drive the growth of the market in focus during the forecast period.
Increasing investments in AI start-ups is an emerging trend influencing the growth of AI Chips Market. Since AI technology is still in its infant stage, its adoption is expanding rapidly across many industries. As a result, a number of businesses, including start-ups, are entering the market for AI chips to benefit from the rising demand for AI technology. Approximately 70%-75% of businesses are predicted to have adopted AI technology in some capacity within the next 20 years.
Furthermore, due to the enormous market potential for AI chips, major chip manufacturers and venture capitalists have been making sizeable investments in a number of start-up companies for the creation of AI platforms and chipsets. For example, Shanghai-based startup Innostar Semiconductor raised USD 100 million funding in a pre-series A round of funding in 2021. This was led by Shanghai Lianhe Investment and joined by New Alliance as well as new investors Atlas Capital and KQ Capital. The money will be used by the business to create chips for resistive RAM and storage. Hence, these factors will drive the growth of the AI chips market during the forecast period.
Complexities in understanding data are major challenges impeding artificial intelligence chips market growth. Language, context, and reasoning are three obstacles that AI must get past in order to understand data at its best. Currently used AI technologies face challenge processing information in the same way that humans do. This is due to the fact that the majority of information is processed as data rather than as language. Since AI interprets the data as spatial text, contextual issues arise. However, natural language must be processed in the appropriate context, which can only be created when the language is actually understood rather than just being read.
To make decisions, AI technologies must process the data and arrive at the proper understanding. AI technology cannot solve complex problems without the ability to understand. This poses a significant challenge for the market because numerous AI systems must analyze enormous amounts of data that are processed continuously. The market will continue to observe limited growth unless highly efficient AI chips and systems are created to overcome the complexities involved in understanding data. Therefore, such factors will hinder the artificial intelligence chips market growth during the forecast period.
The market share growth by the ASICs segment will be significant during the forecast period. ASICs are specialized, non-configurable chips that are highly customized. ASICs are programmable integrated circuits (ICs) that resemble GPUs in appearance but provide an instruction set and libraries that enable the IC to operate on locally stored data and serve as an accelerator for numerous parallel algorithms. Moreover, ASICs perform faster than GPUs and FPGAs but cannot be reconfigured.
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The ASICs segment was valued at USD 3,206.60 million in 2017 and continued to grow until 2021. The segment is being driven by the use of ASICs in cloud-based data centers. ASIC-based AI chips are expanding their market share as data center applications favor them over GPUs and FPGAs. When compared to GPUs, FPGAs, and CPUs, these chips deliver greater performance and speed. For instance, Google has created an ASIC for deep neural networks called the Tensor Processing Unit (TPU). TPU is a network of hardware and software that can analyze a lot of data to learn specific tasks. Applications like Google Street View and Google Search already make use of it. To effectively manage the data, many data centers are, therefore, integrating TPUs at the back end of servers. These TPUs have a set of instructions that can be used to modify TensorFlow programs and create new algorithms. Tensor Processing Units (TPU) v4 was successfully introduced by Google in May 2021. Compared to TPU v3 hardware, TPU v4 will double TPU hardware performance. On the Google cloud platform, the new version will speed up machine learning training. Microsoft and Amazon.com are also working on TPUs and are planning to implement them in their cloud offerings. Therefore, AI chips based on ASICs are expected to witness significant growth during the forecast period.
The media and advertising sector, particularly in emerging economies, is the largest end-user segment driving the demand for AI chips. Despite being in their infancy, artificial intelligence technologies have piqued significant interest in these industries. Their potential to shape the next generation of media and advertising is substantial. This increasing interest is expected to drive the growth of the AI chip market in focus.
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North America is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The North American market for artificial intelligence chips is experiencing significant growth, primarily driven by increased investments in autonomous vehicles. These vehicles incorporate advanced systems such as ADAS, HUD, LiDAR, and RADAR. Electronic components like sensors, microcontrollers, microprocessors, and RF components play a crucial role in generating and processing real-time data. Consequently, chip manufacturers are investing heavily in R&D to develop AI chips specifically designed for autonomous vehicles.
North America is home to several top automakers, including Ford, GM, Chrysler, and Porsche. Luxury and sports car production is prominent in Canada, the US, and Mexico. The region has witnessed substantial investments in facility construction and capacity expansion. The demand for autonomous cars in North America is driven by factors such as reducing accidents caused by human error, decreasing carbon dioxide emissions, enhancing battery capacity, and reducing fuel consumption. Consequently, automotive OEMs are increasingly investing in AI technologies and collaborating with market vendors to develop systems that enable Level 5 autonomous vehicles. These factors collectively contribute to the growth of the artificial intelligence chips market in the forecast period.
The implementation of lockdown measures during the COVID-19 pandemic resulted in temporary closures of various industries, prompting a surge in remote work arrangements and the adoption of work-from-home policies. This shift towards remote work led to an increased adoption of cloud-based analytics platforms, including AI-based CRM solutions, in the retail and e-commerce sector. Additionally, the successful implementation of vaccination campaigns in North American countries, aided by artificial intelligence, contributed to a decline in COVID-19 cases. As the economy reopened and resumed operations, there is an expected significant boost in the demand for artificial intelligence chips, thereby driving the growth of the focused artificial intelligence chips market during the forecast period.
The Artificial Intelligence (AI) Chips Market industry report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Artificial Intelligence (AI) Chips Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
NVIDIA- The company offers artifical intelligence chips under its brand GEFORCE.
Broadcom- The company offers artifical intelligence chips such as Tomahawk 4, Trident 4.
Cerebras.net- The company offers artifical intelligence chips such as WSE-2.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The artificial intelligence (AI) chips market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Artificial Intelligence (AI) Chips Market Scope |
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Report Coverage |
Details |
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Page number |
181 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 61.51% |
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Market growth 2023-2027 |
USD 210,506.47 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
48.54 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 37% |
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Key countries |
US, China, Taiwan, UK, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Advanced Micro Devices Inc., Alphabet Inc., Baidu Inc., Broadcom Inc., Cerebras Systems Inc., Fujitsu Ltd., Graphcore Ltd., Huawei Technologies Co. Ltd., Intel Corp., International Business Machines Corp., MediaTek Inc., Microchip Technology Inc., NVIDIA Corp., NXP Semiconductors NV, Qualcomm Inc., SambaNova Systems Inc., Samsung Electronics Co. Ltd., SenseTime Group Inc., Taiwan Semiconductor Manufacturing Co. Ltd., and Tesla Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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