“The developments in generative AI and the increasing use of a wide range of AI-based applications in data centers, edge infrastructure and endpoint devices require the deployment of high performance GPUs and optimised semiconductor devices. This is driving the production and deployment of AI chips,” says Gartner vp Alan Priestley.
AI semiconductor revenue will grow 25.6% in 2024 to $67.1 billion (see Table 1).
By 2027, AI chips revenue is expected to be $119.4 billion.
Table 1. AI Semiconductors Revenue Forecast, Worldwide, 2022-2024 (Millions of U.S. Dollars)
| 2022 | 2023 | 2024 | |
| Revenue ($M) | 44,220 | 53,445 | 67,148 |
Source: Gartner (August 2023)
In the consumer electronics market, Gartner analysts estimate that by the end of 2023, the value of AI-enabled application processors used in devices will amount to $1.2 billion, up from $558 million in 2022.
“For many organisations, large scale deployments of custom AI chips will replace the current predominant chip architecture – discrete GPUs – for a wide range of AI-based workloads, especially those based on generative AI techniques,” says Priestley.
Generative AI is also driving demand for high-performance computing systems for development and deployment, with many vendors offering high performance GPU-based systems and networking equipment seeing significant near-term benefits.
In the long term, as the hyperscalers look for efficient and cost-effective ways to deploy these applications, Gartner expects an increase in their use of custom-designed AI chips.
