Omdia: Artificial intelligence drives strong demand, semiconductor market revenue expected to surge by about 25% in 2024.

2024 was a record-breaking year for the semiconductor market, with Omdia data showing a surge in revenue of about 25% to $683 billion. This rapid growth was attributed to strong demand for AI-related chips, especially High Bandwidth Memory (HBM) used in AI GPUs, leading to a 74% annual growth rate in the memory sector. After a challenging 2023, the rebound in memory helped boost the overall market. However, this record-breaking year masked uneven performances across the industry. Data processing sectors saw strong growth, while other key sectors such as automotive, consumer, and industrial semiconductors experienced revenue declines in 2024. These struggles highlighted weaknesses in an otherwise thriving market. AI and memory achieve strong results in 2024 Throughout 2024, the impact of AI on the semiconductor market remained dominant, driving record revenue and reshaping industry dynamics. NVIDIA Corporation emerged as a rightful leader with its AI GPUs, witnessing strong revenue growth over the past few years and continuously increasing market share. As a crucial component of AI applications, the sales of HBM also surged, significantly boosting revenue for memory companies. Although HBM grew faster than other DRAM areas, improvements in supply-demand balance also led to higher average selling prices (ASPs) and revenue growth for the entire memory market. Industrial sector faces second consecutive year of decline The decline in the industrial semiconductor sector began in 2023 and deepened in 2024, posing challenges for companies focusing on this area. "Historically, the industrial semiconductor market grows by around 6% each year, but after experiencing two years of above-average growth in 2021 and 2022, semiconductor market revenue showed a double-digit decline in 2024." Omdia's Chief Analyst, Cliff Leimbach, said: "Decreased demand along with inventory adjustments made 2024 a difficult year for the industrial sector. Market share rankings for companies with significant business in this sector also declined as a result." Automotive market stagnates While the automotive semiconductor market performed better than the industrial sector, it also experienced a revenue decline in 2024. From 2020 to 2023, the automotive semiconductor market nearly doubled in size, far exceeding the historical average annual growth rate of 10%. Soft demand led to a contraction in 2024, breaking the steady upward trajectory of the market in recent years. NVIDIA Corporation (NVDA.US) takes the top spot, market rankings shift NVIDIA Corporation's dominant position in the AI-driven GPU sector propelled it to the top spot in semiconductor company revenue rankings, surpassing Samsung, which held the top spot in 2023. The strong memory market also reshaped the rankings, with Samsung, SK Hynix, and Micron all among the top seven largest semiconductor companies by revenue. Compared to the rankings in 2023, these companies all moved up at least one position, marking significant changes compared to the previous year when these companies were distributed among the top eleven positions.