Demand for AI Chips is Rapidly Expanding: Analysis of China's Intelligent Chip Industry Status
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AI chips mainly fall into three categories: general-purpose chips optimized through hardware and software to efficiently support AI applications, such as GPUs; chips focused on accelerating machine learning (especially neural networks and deep learning) algorithms, which currently represent the most common form of AI chips; and neuromorphic computing chips inspired by biological brains. The implementation of AI technology requires support from multiple levels, spanning application, algorithm mechanisms, chips, toolchains, devices, processes, and materials. Each level is interconnected to form the AI technology chain, with AI chips positioned in the middle of this chain—providing efficient support for applications and algorithms above while driving demands for devices, circuits, processes, and materials below.
Artificial intelligence chips have two prominent features: first, a high degree of alignment between algorithms and chips to enhance computing power for different needs in terminals and cloud environments; second, specialized intelligent chips tailored for segmented application scenarios, such as voice recognition chips, image recognition chips, and video surveillance chips. Currently, artificial intelligence is in the early stages of industrialization, with all countries standing on the same starting line. The Chinese government has given high-level attention to AI from top to bottom, completing a series of policy-level top-level designs. Additionally, China's vast data resources, management of data sovereignty, and localization of application scenarios will further boost the rise of local chip companies. Foreign enterprises rooted in China should actively participate in the wave of AI development, collaborating with local companies in technology, market, and talent to achieve mutual benefits and contribute to the growth of China's AI industry.
Currently, AI chip design is more driven by technical requirements, such as chip architecture selection and performance improvement. As competition in the AI chip field intensifies, companies must not only achieve technological breakthroughs but also expand their application scenario layouts to seize more development opportunities. To adapt to the fragmented application market, future chip designs must be guided by end-user needs, analyzing feasibility from aspects like demand volume, commercialization models, and market barriers, leveraging scenario implementation to achieve scalable development of AI chips.
Latest IDC data shows that global AI-related IT investment reached $128.8 billion in 2022 and is projected to grow to $423.6 billion by 2027, with a five-year compound annual growth rate (CAGR) of approximately 26.9%. In terms of market size, the demand for AI chips is rapidly expanding. According to Frost & Sullivan data, the global artificial intelligence chip market size was $25.5 billion in 2021. It is expected that from 2021 to 2026, the global artificial intelligence chip market will grow at a compound annual growth rate of 29.3%, reaching $49 billion by 2023. According to calculations by EqualOcean Intelligence, China's core artificial intelligence industry market size will reach 400 billion yuan by 2025, with the market size of basic layer chips and related technologies accounting for approximately 174 billion yuan.
With intensifying global competition, China's AI chip industry is facing an important period of opportunity. Data shows that by 2023, China's AI chip market size will further expand to 120.6 billion yuan.
Currently, the domestic artificial intelligence chip market is showing a flourishing development trend
AI chips are widely applied in various fields such as financial securities, product recommendations, security, consumer robotics, autonomous driving, and smart homes, giving rise to numerous AI startups like Horizon Robotics, DeePhi Tech, Cambricon, Unisound, and Intellifusion. With strong policy support, China's AI chip market is developing rapidly.
In recent years, the advancement of AI technology has driven precision, intelligence, and efficiency in speech recognition, mechanical control, and economic policy decision-making. Flexible electronics serve as the foundational support for artificial intelligence, leading and expanding AI applications in more fields. Flexible artificial neuromorphic chips can simulate human brain learning and high-speed computing in real-time, meeting the hardware requirements of AI technologies for ultra-strong processing algorithms like cloud computing. The intelligent characteristics of flexible electronics make them irreplaceable in future information technology. Currently, the electronics industry is predominantly based on rigid devices and systems. With nearly a century of technological accumulation, rigid devices boast mature manufacturing equipment, high operational speed, precision, and stability. However, the limitations of classical silicon-based electronics are becoming increasingly apparent under the influence of Moore's Law. The advent of flexible electronics has opened new directions for the development of classical electronics, triggering the creation of novel electronic devices and revolutionizing daily life. For instance, foldable, rollable, and flexible displays will transform how images and videos are presented, making consumer electronics like smartphones and TVs more innovative and lightweight.
Flexible electronic skins can integrate various flexible sensors. By optimizing the interface between flexible devices and the biological central nervous system, they enable prosthetics to achieve sensory functions, granting robots intelligent bionic tactile capabilities that may even surpass human skin. Flexible health sensors can adhere to the human body to continuously monitor health parameters such as body temperature, heart rate, electrocardiograms, brainwaves, blood pressure, sweat, and blood composition. These sensors also perform intelligent analysis and archiving of the data, facilitating health assessments and remote disease diagnosis. Flexible health monitoring systems allow for continuous, real-time tracking of human health status anytime, anywhere.
Flexible electronics, characterized by their thinness, low energy consumption, excellent biocompatibility, and adjustable mechanical properties, enable health monitoring systems to adhere to human skin long-term without disrupting daily activities. Smart wearable devices can wirelessly connect with applications and networks, blending remote work with leisure or enabling technologies like mind control based on physiological monitoring. Implantable flexible electronic devices offer new treatment methods for complex diseases such as Parkinson's, epilepsy, and depression.
Flexible electronics, born from highly interdisciplinary integration, represents a disruptive scientific and technological breakthrough. It overcomes the inherent limitations of classical silicon-based electronics and provides innovative leadership for post-Moore era device design and integration, energy revolution, and medical technology transformation. This field presents a critical strategic opportunity for China to lead future industrial development through independent innovation. Chart: Market Size of China's Flexible Chip Industry from 2021 to 2023
Data Source: China Research and Intelligence Institute
In recent years, the Chinese government has strategically emphasized the artificial intelligence and AI chip industry. Starting with the 2014 release of the 'National Integrated Circuit Industry Development Promotion Outline,' which identified the IC industry as a national strategic, foundational, and pioneering sector, multiple national-level strategic documents—including 'Made in China 2025,' the 'Internet+ Guidance Opinion,' and the '13th Five-Year Plan'—have specifically highlighted the development directions for AI chips and brain-inspired computing.
Among these, 'Made in China 2025' set a target for China's chip self-sufficiency rate to reach 40% by 2020 and 50% by 2025. The 'New Generation Artificial Intelligence Development Plan,' released in July 2017, further aims for the core AI industry to achieve a scale of 1 trillion RMB by 2030, driving related industries to exceed 10 trillion RMB.
While these policies impose high demands on the IC industry, they also reflect the nation's strong emphasis on this sector. As both AI and the chip industry are elevated to national strategic priorities, the AI chip industry is poised to lead China's 'chip' ambitions forward.
Looking ahead, as AI technology continues to advance, it will face increasing challenges—including conceptual ones. In reality, public expectations for AI are often high, but progress is constrained not only by software and hardware limitations but also by humanity's understanding of itself. Thus, AI technology will likely continue its spiral of development, overcoming existing constraints while encountering new ones. If AI chip companies want to seize opportunities and perform optimally at the right time and place, industry reports containing vast amounts of data, in-depth analysis, professional methodologies, and valuable insights can help them better understand industry trends, risks, and opportunities. Possessing the right insights in the future competition of the AI chip industry could lead to gaining a leading edge at the appropriate time and place.
The AI chip industry data analysis in research reports is based on authoritative national statistics, employing a combination of macro and micro analytical approaches. Using scientific statistical methods, it provides an overview of the industry while conducting detailed analyses, including key enterprise conditions. The reports primarily utilize charts and tables to visually illustrate the economic type composition, scale structure, operational efficiency comparisons, and supply-demand status of the industry, serving as an essential tool for companies to understand the market conditions of the AI chip industry. In terms of format, the reports emphasize readability and visual appeal with rich data and graphics, avoiding clichés and empty rhetoric. They also include industry-related data, policy and regulation directories, key enterprise information, and major industry events, offering investors and professionals a vivid panoramic view of the industry.