SIA: Global chip sales are expected to grow 13% this year to nearly $600 billion after falling last year

Annual sales data released by the Semiconductor Organization on Monday (February 5) showed that surging demand for artificial intelligence (AI) and steady growth in automotive chips will help drive a rebound in global chip sales this year.

The U.S. Semiconductor Industry Association (SIA) predicts that global chip sales will increase by 13.1% to reach $595.3 billion, while sales in 2023 are estimated to decline by approximately 8%.

SIA CEO John Neuffer said in an interview: "AI is a super powerful market. Looking at the overall situation, there are many positive things worth paying attention to."

Robert Casanova, director of industry statistics and economic policy at SIA, said that although automotive chips have started slowly this year, the chip market is still expected to grow by 6%.

Sales of so-called "logic" chips rose 1.1% to $178.5 billion last year as weak demand for PCs and smartphones hurt chipmakers such as Intel and Qualcomm. Storage sales plunged 29% to $92.3 billion, making it the second-largest category tracked by SIA.

But this year, as cloud computing companies seek to build more capabilities to execute such software, technology giants have rushed to offer products and services for deploying AI, triggering a surge in demand for advanced chips made by Nvidia.

AI applications require combining a large number of graphics processing units (GPUs) and surrounding them with a range of other types of chips to achieve the required performance. AI systems require large amounts of high-bandwidth memory and fast network processors made by SK Hynix to transfer data between them.