AI Surge Fuels 2024 Semiconductor Revival: AMD, Nvidia, and Chinese Firms Lead the Charge
1min read The global semiconductor industry is poised for a resurgence in 2024, driven by increased demand in AI and high-performance computing sectors. The front-line beneficiaries are firms in the assembly, testing, and packaging segment, which have observed significant recovery in earnings and expect robust performance in the latter half of the year.
AI chip demand, particularly impacting Nvidia's ecosystem, has spread to rival AMD, showcasing impressive growth. AMD's data center segment reported a revenue surge of over 100% in the second quarter. Suppliers in China, such as TongFu Microelectronics, have experienced noticeable benefits, reporting an 11.83% increase in revenue and a return to profitability in H1 2024.
The upbeat performance extends to other major testing and packaging firms, like Jiangsu Changjiang Electronics and Huatian Technology, which have achieved high year-on-year growth. These firms made strategic investments to upgrade production lines and expand capacity in response to burgeoning AI-driven chip demand.
With improvement in shipment levels and reduced inventory pressures, the semiconductor market is witnessing a revival. Several high-value sectors, such as automotive electronics, high-performance computing, storage, and 5G, are reinvigorating the industry. Key players are focused on high-performance packaging technologies, adding substantial value to the industry.
Leading companies in the packaging sector, such as ASE and Amkor, forecast strong quarter-on-quarter growth driven by the automotive and industrial semiconductor markets. The Taiwanese packaging firms have consistently reported improved revenues for consecutive months, signaling a sustained recovery in the third quarter.
On the consumer electronics front, the anticipated adoption of AI in smartphones and PCs is projected to trigger a new wave of device replacements. In Q2 2024, the global smartphone market achieved double-digit growth with shipments reaching 2.9 billion units, marking a third consecutive quarter of expansion.
The AI chip market is forecasted to grow by 33% in 2024, reaching $71.3 billion, with the server AI chip market expected to rise by 40% to $21 billion. This growth is largely due to the demand for digital high-performance signal processing chips across 5G and data center infrastructures.
Automotive electronics continue to advance toward intelligent and electric solutions, driving steady growth in smart driving and power module markets, which are expected to be worth $25.9 billion and $16.6 billion respectively by the end of 2024. This trend is a testament to the transformative impact of AI chip demand on various sectors.