The semiconductor industry is to reach US$1 trillion in revenue this year for the first time, fueled by artificial intelligence (AI) and the spread of computer chips to virtually every part of the economy.
Total industry sales were US$791.7 billion last year and are forecast to chalk up another 26 percent surge this year, the Semiconductor Industry Association (SIA) said.
The market is hitting the US$1 trillion milestone much faster than originally anticipated — something that bodes well for the business world at large, SIA chief executive officer John Neuffer said.
Photo: Reuters
“When we have growth in our sector, it means exponential benefits in other sectors,” Neuffer said in an interview. “Our technology is foundational for pretty much every critical strategic industry. It’s a pretty good fundamental sign.”
Colossal demand for new data centers has provided a bonanza for Nvidia Corp, Micron Technology Inc and other chipmakers. That has allowed the industry to keep eclipsing growth estimates.
Forecasters previously thought it might take four more years to reach a trillion-dollar level, Neuffer said.
Revenue from logic chips — often described as the brains of devices — soared 40 percent to US$301.9 billion last year.
Sales of memory chips, which help computers store and manage data, grew 35 percent to US$223.1 billion, SIA data showed.
On a regional basis, Asia-Pacific, the Americas, Europe and China posted growth, with only Japan declining, the data found.
The chip market would continue to have its characteristic boom-and-bust cycles, but the long-term upward trend is clearly established, Neuffer said.
“We do like our oscillations, and this is no doubt going to continue,” he said. “The pie is just simply getting bigger.”
Nvidia chief executive officer Jensen Huang (黃仁勳) on Friday said that spending on data centers and other AI infrastructure is sustainable, downplaying concerns that his customers are throwing too much money at the technology.
The build-out of AI will continue for seven to eight years, Huang told CNBC.
“AI has become useful and very capable,” he said. “The adoption of it has become incredibly high.”
US-China trade tensions have cast a cloud over the industry, but the relationship between the world’s two largest economies is showing signs of improving, Neuffer said.
Washington has imposed increasingly restrictive export curbs in the past few years, and Beijing has responded in kind.
For the US chip industry to thrive in the long run, there needs to more state support of research and development, as well as immigration reform that allows the country to attract and retain overseas talent, he said.
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