The global semiconductor industry witnessed remarkable growth in 2024, with total revenue reaching $626 billion, marking an impressive 18.1% increase from the previous year, according to a report released by Gartner on Monday. This positive momentum suggests the industry is far from slowing down, with projections indicating semiconductor revenue will climb to $705 billion by 2025.
Memory products dominated the market, but non-memory semiconductor revenue was no slouch, recording a 6.9% increase this past year, accounting for 74.8% of the overall industry revenue. The report notes significant performance variations among the top 25 semiconductor companies: 11 managed to post double-digit revenue increases, whereas only eight experienced declines.
Samsung Electronics reclaimed its status as the world’s leading semiconductor vendor, overtaking Intel, which struggled to maintain momentum. This shift was facilitated by the recovery of memory prices, boosting Samsung's revenue to $66.5 billion. Meanwhile, Intel's performance was lackluster, barely edging up with just 0.1% growth.
Nvidia, on the other hand, surged to third place among semiconductor vendors, recording astounding growth of 84% to reach $46 billion. Much of Nvidia's success stemmed from its strong position within AI technologies, allowing it to capitalize on the burgeoning demand for high-performance GPUs.
The memory segment proved pivotal to the industry’s overall expansion, with revenue skyrocketing by 71.8% across the sector. Both DRAM and NAND revenues climbed significantly, by 75.4% and 75.7% year-over-year, respectively. A key driver of this growth was the increasing demand for high-bandwidth memory (HBM). Notably, HBM represented 13.6% of total DRAM revenue for 2024, and its share is anticipated to rise to 19.2% by 2025.
George Brocklehurst, VP Analyst at Gartner, emphasized the role of AI, asserting, "AI and generative AI workloads were central in propelling data centers to become the second-largest market for semiconductors in 2024." Indeed, data center semiconductor revenue surged to $112 billion, showcasing dramatic growth from $64.8 billion the previous year.
This evolution is symptomatic of larger trends within the semiconductor industry. The continuing development of AI and increasing needs for high-bandwidth memory solutions significantly shaped the sales patterns observed this year. Most notable was the acute demand for memory chips, particularly as AI workloads grow more complex and pervasive.
Reflecting on the competitive climate, Samsung’s resurgence to the number one position alongside Nvidia’s remarkable climb suggests the semiconductor market's volatility. Memory devices represented 25.2% of total semiconductor market share, underscoring their significance amid fluctuational market conditions.
Going forward, analysts anticipate the demand for both memory and AI-driven semiconductors to sustain the industry’s momentum. HBM, which is projected to account for 19.2% of DRAM revenue by 2025, is poised to be especially lucrative, with estimated revenue reaching $19.8 billion, signifying growth of 66.3% from 2024.
With such dynamics at play, the semiconductor industry stands at the precipice of substantial evolution. The increasing reliance on advanced semiconductor technology to fuel innovations across sectors highlights just how integral this industry has become to the global economy. It is clear, as demand escalates and technology continues to evolve, the semiconductor market will remain a hotbed of activity, driving forward progress not just for its own sector but for the technology sector as a whole.