Thai demand adds to surge in global AI chip market

TUESDAY, JULY 09, 2024

The global AI semiconductor industry is poised to soar in 2024, with revenue expected to reach US$71 billion, marking a 33% increase from 2023, according to the latest forecast from management consultancy Gartner.

Thailand’s AI software market is adding to the surge with expected growth of 43% per year, reaching over 5 billion baht ($141.6 million) by 2027, says global IT researcher IDC.

Alan Priestley, VP analyst at Gartner, attributes the global growth to rising demand for high-performance AI chips in data centres, driven by the surge in generative AI (GenAI) applications. 

"In 2024, the value of AI accelerators used in servers, which offload data processing from microprocessors, will total $21 billion, and increase to $33 billion by 2028," he estimated.

The forecast also highlights the rapid adoption of AI personal computers, which are expected to account for 22% of total PC shipments by 2024. Gartner predicts that by the end of 2026, all enterprise PC purchases will be AI-enabled. 

These advanced machines, outfitted with neural processing units (NPUs), provide increased performance and efficiency, allowing continuous AI task processing in the background.

While the AI semiconductor market is expected to grow by double digits in the coming years, the fastest growth rate is expected in 2024. According to Gartner, revenue will rise from $53.7 billion in 2023 to $71.3 billion in 2024, then to $92 billion by 2025.

Thai demand adds to surge in global AI chip market

In terms of market segments, computer electronics is expected to dominate, accounting for 47% ($33.4 billion) of AI semiconductor revenue in 2024. The automotive and consumer electronics sectors also make significant contributions, with projected revenues of $7.1 billion and $1.8 billion, respectively.

Spending on AI in Thailand is currently led by the financial services sector, which accounts for 27.1%, said IDC. Manufacturing comes second with 19.1% while e-government services are third on 14.7%. 

The Gartner report also mentions increased competition between traditional semiconductor vendors and major technology companies.

Hyperscalers such as AWS, Google, Meta, and Microsoft are increasingly investing in developing their own AI-optimised processors. 
This trend is set to continue as the market transitions from development to deployment, potentially reshaping the industry landscape.