Global Market for AI Chipset Anticipated to Surpass US$ 700 Billion

08/08/2023

The global market for artificial intelligence (AI) chipsets is expected to experience significant growth due to the increasing demand for intelligent consumer electronics. The market was valued at approximately US$45.5 billion in 2021 and is projected to achieve a compound annual growth rate (CAGR) of 31.8% from 2022 to 2031. By 2031, the market is estimated to reach a valuation of US$717.4 billion. The rise in demand for AI chips in consumer electronics products such as high-end mobile devices, tablets, intelligent speakers, and wearables is a key driving factor for the market’s growth. Smartphone companies are developing AI-based devices that consume less power and can perform up to 5 trillion processes per second. Additionally, AI image recognition is being used to enhance photo quality.

The demand for AI chipsets is driven by the need to handle the increasing data generated by smart devices for AI applications. General-purpose central processing units (CPUs) struggle to manage this data, leading to the utilization of application-specific integrated circuits (ASICs) and graphics processing units (GPUs) in AI applications. ASICs are specifically designed for tasks such as artificial intelligence and cloud computing and integrate established algorithms. The market is characterized by the development of sophisticated packaging technology to ensure that AI hardware remains within the thermal budget. Edge-based AI chips are expected to dominate the market based on deployment, and various consumer goods, including smartphones, computers, tablets, and smart home appliances, are increasingly incorporating AI processors.

Additionally, manufacturers of home appliances are focusing on creating advanced products to meet growing consumer demand and are developing their chips to reduce reliance on external suppliers. The market is led by North America, particularly the United States, which has extensive growth potential due to the use of electronic design automation technologies to create cutting-edge AI hardware. The Asia Pacific region is expected to experience high growth during the forecast period due to its large consumer electronics and automotive markets, with China leading in manufacturing and using lower-edge nodes for AI hardware production. Key players in the global AI chipset market include Alphabet, NVIDIA Corporation, Intel Corporation, IBM, Apple, Huawei, MediaTek, Google, Intel, Baidu, and Graphcore.