Analysts stated at this month’s annual Semicon West trade exhibition in San Francisco that global semiconductor sales are expected to reach $1 trillion as early as 2030. According to report, semiconductor capacity would increase by more than 50% by the end of the decade, with double-digit growth predicted for 2024 and 2025.
As the forces of autonomy, labor, power, and geopolitics shape the future, chips are projected to continue in high demand across a range of industries, including AI, automotive, smart spaces, and commercial drones.
AI, in Accenture’s Elias Eliadis’ opinion, can be very important. He stated that there are plans to create fully autonomous smart factories driven by generative AI that require little human intervention. Furthermore, Gupta projects that human-robot interaction will increase to 80% in the next five years, which might boost foundry productivity.
According to Dieseldorf, billions have already flowed into homeshoring chip manufacturing across China, Japan, India, Spain, Germany, UK, Singapore, Taiwan, Italy, Korea, and Malaysia as nations compete to strengthen national security and develop for economic growth. Furthermore, even though the US has used $52 billion from the US CHIPS Act to bring chip production domestically, it may be too little, too late for the US to surpass its 10% market share at this point.
With plans to build plants across Arizona, Colorado, Minnesota, New Hampshire, New Mexico, New York, Oregon, Ohio, and Texas, recipients of funding to date include Intel, TSMC, Samsung, Micron, GlobalFoundries, Microchip Technology, Polar Semiconductor, BAE Systems, GlobalWafers, Rogue Valley Microdevices, and Absolics.
Furthermore, $500 million has been allocated for the International Technology Security and Innovation Fund, or ITSI, to support nearshoring and friendshoring initiatives with associate nations such as Mexico, Costa Rica, Panama, and India.
Nvidia based on the figures
With Nvidia surpassing the $3 trillion valuation threshold in June, all eyes are on the company. As of the end of last year, the AI chip giant led by Mario Morales of IDC in terms of global semiconductor revenue with over 10%. This puts it ahead of a group that included Intel, Samsung, Apple, Qualcomm, SK Hynix, Broadcom, AMD, Micron, STMicroelectronics, Infineon, Texas Instruments, Sony, and NXP, which together accounted for 72% of the market.
A clear reminder of how much is riding on AI was provided by charts that showed Nvidia’s revenue skyrocketing to $22.1 billion at a 76% gross margin during the same period, while Intel’s revenue came in at $15.4 billion at a 46% gross margin.
In describing how Nvidia has been able to create such large margins due to advantageous pricing that allows it to purchase AI processors at $600 to $700 for a product the AI chip giant sells for $200,000, Shi cited CC Wei, the chief executive officer of TSMC.
Wei has indicated that price increases that would offer suppliers a larger share of the market should be anticipated if the boom continues.
