AI chip revenue expected to jump 33% this year

Revenue from AI semiconductors is forecasted to total $71 billion globally in 2024, an increase of 33% from 2023, so says a Gartner report.

Andrew Wooden

May 29, 2024

2 Min Read

Gartner also says ‘AI PC’ shipments will reach 22% of the total PC shipments in 2024, and by the end of 2026, 100% of enterprise PC purchases will be an AI PC. And if you’re wondering what an AI PC is, Gartner categorises them as having a neural processing unit (NPU), which apparently enables them to run longer, quieter and cooler and have AI tasks running continually in the background.

In terms revenue associated with AI chips that are shipped within devices, the computer electronics segment is projected to account for $33.4 billion in 2024, which will mean 47% of total AI semiconductors revenue, while AI chip revenue from automotive electronics is expected to reach $7.1 billion, and consumer electronics $1.8 billion, claims the report.

2024 will experience the highest growth rate for AI chip revenue during the period it tracks, as shown in this table:


“Today, generative AI (GenAI) is fuelling demand for high-performance AI chips in data centres. In 2024, the value of AI accelerators used in servers, which offload data processing from microprocessors, will total $21 billion, and increase to $33 billion by 2028,” said Alan Priestley, VP Analyst at Gartner.

The report also predicts a ‘fierce battle between semiconductor vendors and tech companies’. The claim here is that while much of the focus for AI workloads is on the use of high-performance graphics processing units (GPUs), which Nvidia is currently making an absolute killing on, the major hyperscalers (AWS, Google, Meta and Microsoft) are all investing in developing their own chips optimised for AI.

Custom designed chips are expensive but can improve operational efficiencies, reduce the costs of delivering AI-based services to users, and lower costs for users to access new AI-based applications, states Gartner. “As the market shifts from development to deployment we expect to see this trend continue,” added Priestley.

In terms of the wider semiconductor market, late last year Gartner put out a report claiming 2024 would be a ‘bounce-back year’ for semiconductor revenues, forecasting a 16.8% hike. In that forecast, it predicted the industry would rake in $624 billion and revenue, and while all chip types were expected to grow, it called out the memory market in particular, forecasting growth of 66.3%.

About the Author(s)

Andrew Wooden

Andrew joins on the back of an extensive career in tech journalism and content strategy.

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