The rise of generative AI, initiated by the release of ChatGPT in 2022, and the continuous expansion of data-intensive AI/HPC applications in data centres led to a significant surge in 2023, directly impacting the processor market segment.
These trends will propel continuous market growth throughout the next five years, as announced by Yole Group in its annual report, Status of the Processor Industry 2024.
The Status of the Processor Industry report, 2024 edition, encompasses the various processor technologies, including CPUs, GPUs, APUs, SoC FPGAs, AI ASICs, and DPUs, each with distinct market trends, revenue, and volume forecasts. In this new report, the market research and strategy consulting company analyses the main drivers of these markets to point out key trends, such as advancements in processor technologies. This analysis combines current and future developments shaping their respective technology roadmaps. These advancements cover IP, transistor scaling, processor packaging, chiplet design, and the continued relevance of Moore’s Law in next-gen computing. The processor industry’s ecosystem and supply chain are vital components, with recent industry developments highlighting the financial performance and strategic positioning of the top ten processor companies. Yole Group investigates the competitive landscape in detail, including a special focus on the Chinese players.
Today, processors are the primary market segment for semiconductor products: combined CPU, GPU, APU, FPGA, AI ASIC, and DPU revenues accounted for 42% of the overall semiconductor market. This market is set to experience significant growth to $480 billion in 2029, with GPUs and AI ASICs at the forefront of this growth.
While APUs, CPUs, and GPUs currently lead the market in this order, GPUs are projected to surpass other segments due to their critical role in AI-driven workloads. Yole Group projects a 25% CAGR for GPUs from 2023 to 2029, compared to 5% for CPUs and 8% for APUs. Therefore, the GPU segment is projected to become two times bigger than its CPU counterpart by 2029.
“Large investments in AI hardware for data centre applications have propelled fast growth in the telecom & infrastructure market segment. At Yole Group, we point out a 22% CAGR between 2023 and 2029 for this market. The segment is projected to overtake mobile & consumer in 2024. And we think it will account for more than 60% of processor revenues in 2029,” said Adrien Sanchez, Senior Technology & Market Analyst, Computing & Software at Yole Group.
Behind this dynamic industry, semiconductor companies such as Intel, Nvidia and AMD are leading the processor ecosystem: these three companies occupy the top three rankings in 2023, closely followed by Apple and Qualcomm.
“Intel and Nvidia mainly target data centres and PCs. For now, Nvidia isn’t directly competing in Intel’s market. Nvidia handles GPUs, Intel takes care of CPUs. But Nvidia hasn’t hidden its plans to replace x86 data centre CPUs with its Grace CPU. So, the next few years could be tough for Intel, especially with growing competition in laptop processors from AMD, Qualcomm, and Apple,” said Hugo Antoine, Technology & Market Analyst, Computing & Software at Yole Group.
Further down the processor ranking, Google and Amazon are focusing on data centres with their custom AI ASICs. Broadcom is mainly focusing on data centres and telecom. HiSilicon has traditionally focused on industrial, telecom, and consumer markets but is now expanding its AI acceleration capabilities in the data centre sector.
