This market research report was originally published at the Yole Group’s website. It is reprinted here with the permission of the Yole Group.
Amidst booming demand for AI accelerators, Nvidia is set to dominate the generative AI revolution.
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The processor market generated revenue of $220 billion in 2023 and is on track to reach $480 billion by 2029, reflecting significant growth with a 14% CAGR.
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The landscape is expected to change dramatically due to the robust demand for generative AI applications.
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GPUs are projected to outpace overall market growth significantly.
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The data center segment accounted for 38% of the total market in 2023, ahead of the mobile segment. The new use cases enabled by generative AI require significant investments in AI hardware, which are expected to continue driving data center market growth over the next five years.
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Ecosystem: Intel and AMD are leading the market on the CPU side, while Nvidia and AMD lead on the GPU side…
The rise of generative AI, initiated by the release of ChatGPT in 2022, and the continuous expansion of data-intensive AI/HPC applications in data centers led to a significant surge in 2023, directly impacting the processor market segment. These trends will propel continuous market growth throughout the next five years, as announced by Yole Group in its annual report, Status of the Processor Industry 2024.
The Status of the Processor Industry report, 2024 edition, encompasses the various processor technologies, including CPUs, GPUs, APUs, SoC FPGAs, AI ASICs, and DPUs, each with distinct market trends, revenue, and volume forecasts. In this new report, the market research and strategy consulting company analyzes the main drivers of these markets to point out key trends, such as advancements in processor technologies. This analysis combines current and future developments shaping their respective technology roadmaps. These advancements cover IP, transistor scaling, processor packaging, chiplet design, and the continued relevance of Moore’s Law in next-gen computing. The processor industry’s ecosystem and supply chain are vital components, with recent industry developments highlighting the financial performance and strategic positioning of the top ten processor companies. Yole Group investigates the competitive landscape in detail, including a special focus on the Chinese players.
Today, processors are the primary market segment for semiconductor products: combined CPU, GPU, APU, FPGA, AI ASIC, and DPU revenues accounted for 42% of the overall semiconductor market. This market is set to experience significant growth to $480 billion in 2029, with GPUs and AI ASICs at the forefront of this growth.
While APUs, CPUs, and GPUs currently lead the market in this order, GPUs are projected to surpass other segments due to their critical role in AI-driven workloads. Yole Group projects a 25% CAGR for GPUs from 2023 to 2029, compared to 5% for CPUs and 8% for APUs. Therefore, the GPU segment is projected to become two times bigger than its CPU counterpart by 2029.
“Large investments in AI hardware for data center applications have propelled fast growth in the telecom & infrastructure market segment. At Yole Group, we point out a 22% CAGR between 2023 and 2029 for this market. The segment is projected to overtake mobile & consumer in 2024. And we think it will account for more than 60% of processor revenues in 2029.”
Adrien Sanchez
Senior Technology and Market Analyst, Computing and Software, Yole Group
Behind this dynamic industry, semiconductor companies such as Intel, Nvidia and AMD are leading the processor ecosystem: these three companies occupy the top three rankings in 2023, closely followed by Apple and Qualcomm.
“Intel and Nvidia mainly target data centers and PCs. For now, Nvidia isn’t directly competing in Intel’s market. Nvidia handles GPUs, Intel takes care of CPUs. But Nvidia hasn’t hidden its plans to replace x86 data center CPUs with its Grace CPU. So, the next few years could be tough for Intel, especially with growing competition in laptop processors from AMD, Qualcomm, and Apple.”
Hugo Antoine
Technology and Market Analyst, Computing and Software, Yole Group
Further down the processor ranking, Google and Amazon are focusing on data centers with their custom AI ASICs. Broadcom is mainly focusing on data centers and telecom. HiSilicon has traditionally focused on industrial, telecom, and consumer markets but is now expanding its AI acceleration capabilities in the data center sector.
Acronyms
- CAGR: Compound Annual Growth Rate
- AI/HPC: Artificial Intelligence / High Performance Computing
Yole Group invites you to follow the latest innovations and related markets in the computing industry at www.yolegroup.com. The article below is one example of editorial content you can discover in our blog section, Industry Insights.
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Following Intel’s recent announcement of a two-year delay in the construction of its chip factories in Germany and Poland, Yole Group’s experts, Emilie Jolivet and Guillaume Girardin review today the reasons that have placed Intel in such an uncertain position.
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