Analysis of the 2024 AI Chip Market Size, Key Manufacturers, and Market Share
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NVIDIA's Stock Price May Hit a New High
The leading AI chip manufacturer NVIDIA has reported good news again, with its pre-market stock price surging over 13% to $763.51. After the market opens, the stock price may reach a new record high. Including this increase, NVIDIA's stock price has already risen by more than 50% this year, continuing the hot upward trend that began last year.
AI development is advancing at a pace equivalent to ten years in one, and NVIDIA is perhaps one of the best examples of this. Today, it once again easily surpassed seemingly insurmountable market expectations, with its stock price rising about 14% at the time of writing, pushing its market capitalization to over $1.9 trillion. The nearly $240 billion increase in one night is equivalent to the combined value of Alibaba and Baidu.
NVIDIA's stock surge is primarily due to its recently released earnings report. The latest financial report shows that NVIDIA's Q4 2023 revenue reached $22.1 billion, a 22% increase quarter-over-quarter and a staggering 265% increase year-over-year, surpassing analysts' expectations of $20.41 billion. Net profit was $12.3 billion, a 765% surge year-over-year, with adjusted earnings per share at $5.16, higher than the expected $4.59. NVIDIA forecasts Q1 revenue of $24 billion, with a fluctuation range of no more than 2%, far exceeding the market expectation of $21.9 billion.
Beyond the explosive demand for generative AI, NVIDIA also provides tailored hardware and software platforms for more specialized industries such as automotive, healthcare, and financial services, as well as niche applications like autonomous driving, drug development, and low-latency machine learning for fraud detection.
More and more customers are becoming competitors. Major NVIDIA clients like Microsoft, Google, Meta, Amazon, and Tesla are investing heavily in developing their own AI chips, and even OpenAI is preparing a chip project. According to China Research Puhua Industry Research Report titled [2024-2029 AI Chip Industry Status and Future Development Trends Analysis Report], AI chips are indispensable core components in intelligent devices, encompassing two key fields: computer science and semiconductor chips.
In the field of computer science, AI chips involve research on high-efficiency intelligent algorithms. In the semiconductor chip field, AI chips focus on how to effectively implement these algorithms on silicon wafers, ultimately transforming them into tangible products that integrate with supporting software.
AI chips are the core hardware of the artificial intelligence industry. The global development level of AI chips is still in its early stages. China, leveraging numerous favorable factors, has the potential to catch up, expand its advantages, and gradually lead the world, demonstrating immense development potential.
The upstream of the AI chip industry chain primarily includes artificial intelligence algorithms, chip design tools, semiconductor materials, and semiconductor equipment. The midstream consists of the AI chip industry, covering chip design, manufacturing, packaging, and testing. The downstream applications span cloud computing, data centers, edge computing, consumer electronics, smart manufacturing, autonomous driving, and smart finance.
Market Size Forecast The accelerated commercialization of artificial intelligence applications is driving rapid growth in the AI chip market. The global AI chip market size is expected to increase from approximately $17.5 billion in 2020 to $72.6 billion (nearly 500 billion yuan) by 2025. According to the China Research Puhua Industry Institute's report [2024-2029 AI Chip Industry Status and Future Development Trend Analysis Report], China's core artificial intelligence industry market size will reach 400 billion yuan by 2025, with the foundational layer of chips and related technologies accounting for about 260 billion yuan.
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 majority 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. These interconnected layers form the AI technology chain, with AI chips positioned in the middle—providing efficient support for applications and algorithms above while driving requirements for devices, circuits, processes, and materials below.
AI chips have two prominent characteristics: first, a high degree of alignment between algorithms and chips to enhance computing power for different terminal and cloud needs; second, specialized intelligent chips for segmented application scenarios, such as speech 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, completing a series of top-level policy designs. With vast amounts of data, sovereign data management, and localized application scenarios, China is poised to further support the rise of local chip companies. Foreign enterprises rooted in China should actively participate in the country's AI development wave, collaborating with local companies in technology, market, and talent to jointly promote the growth and expansion of China's AI industry. Major Manufacturers of AI Chips
Globally, the main companies investing in AI chips include Intel, NVIDIA, Qualcomm, and Google. These companies hold leading advantages in talent aggregation, mergers and acquisitions, and other aspects.
Currently, the domestic AI chip market in China is flourishing. AI chips are widely applied in various fields such as financial securities, product recommendations, security, consumer robotics, autonomous driving, and smart homes. This has given rise to numerous AI startups, including Horizon Robotics, Deephi Tech, Cambricon, Unisound, and Intellifusion. With strong policy support, the domestic AI chip market is developing rapidly.
Market Share
From a regional perspective, Europe and America have always been important markets for global AI chips, maintaining a leading position in the industry with a market share of approximately 42.6%. The Asia-Pacific and Southeast Asian markets account for 16.2% and 11.6%, respectively. In the future, with the rapid development of the semiconductor industry in the Asia-Pacific region, its market dominance is expected to become more prominent.
Looking ahead, as technology continues to innovate and industry competition intensifies, domestic ASIC chips are expected to become key players in the global market and achieve greater breakthroughs in the field of AI chips.