Samsung Electronics has reclaimed its position as the world's leading semiconductor vendor, surpassing Intel, according to a report by Gartner. This achievement is primarily attributed to a strong recovery in memory device prices, which boosted Samsung’s semiconductor revenue to $66.5 billion. The global semiconductor industry experienced a significant 18.1% increase in revenue, reaching $626 billion in 2024. This upward trajectory is expected to persist, with market projections estimating an expansion to $705 billion by 2025.

AI and GPU Demand Fuel Market Surge

The primary driver behind this revenue surge has been the growing demand for graphics processing units (GPUs) and AI processors, particularly in data centre applications such as servers and accelerator cards. This sector has rapidly gained importance, reshaping the semiconductor landscape.

Data Centers Emerge as Key Semiconductor Consumers

According to George Brocklehurst, VP Analyst at Gartner, the increasing demand for AI and generative AI (GenAI) workloads has positioned data centres as the second-largest semiconductor market in 2024, trailing only smartphones. The data centre semiconductor sector recorded an impressive $112 billion in revenue, a sharp rise from $64.8 billion in 2023.

Intel struggles amidst limited AI Success

Intel has moved up to the second position in the market. However, its product lineup, which includes AI PCs and the Core Ultra chipset, was not enough to compensate for the limited success of its AI accelerator offerings and only modest growth in its x86 business. As a result, Intel's semiconductor revenue experienced minimal change, with a growth rate of just 0.1 per cent in 2024.

Nvidia’s AI Boom Propels Market Position

Nvidia saw remarkable growth, with its semiconductor revenue skyrocketing by 84 per cent to $46 billion. This surge allowed the company to advance two positions, securing the No. 3 spot in the industry. Nvidia’s success was primarily fueled by its dominant role in AI-driven computing.

The semiconductor industry continues to experience rapid evolution, with AI and data centre applications at the forefront of this transformation. As the market moves toward a projected $705 billion valuation in 2025, the competition among major vendors is expected to intensify, shaping the future of semiconductor technology.