AI Chips Top Processor Growth

Discrete GPUs and microcontrollers show sustained growth over the next five years, according to TechInsights’ latest semiconductor market forecast. Microprocessors, smartphone processors, and memory should recover from a couple of down years.

The industry has seen contraction since the boost in consumer technology demand brought by the Covid pandemic. However, 2023 ended stronger than expected, and our forecasters have grown more bullish on 2024’s prospects. We expect a trillion-dollar market by 2033.

GPUs are experiencing a significant boost from the sudden demand for generative artificial intelligence (AI). DRAM also shares in that growth, setting up the data center as a locus of higher demand. Memories, however, have been weathering a challenging market, with prices far below what’s necessary for profitability and manufacturing capacity going unused. As inventories recede, memory makers can return to making money.

AI is a noteworthy driver, but its effect is horizontal, crossing many vertical markets. Consumer gadgets, smart homes, industrial, communications infrastructure, and automotive markets will see outsized uptake of AI, but it’s likely to impact all segments of the market to some degree, driving processor features and demand for processors and memory.

The following discussion won’t extend out 10 years; we focus on the forecast through 2028. The full forecast is available to subscribers. We look into the drivers for processors and memory—the primary components discussed in Microprocessor Report.