MOSCOW
The global chip sector is projected to grow further next year, driven by advancements in artificial intelligence (AI) technologies and 5G.
Chips and semiconductors form the backbone of modern technology, with applications ranging from smartphones and computers to industrial machinery, electronics, and even military defense systems.
The chip industry fuels economic growth and fosters innovation across multiple sectors.
In 2024, the chip sector experienced significant expansion, with its market size estimated to have surpassed $600 billion.
According to a report by the consultancy firm PwC, the global chip and semiconductor industry is expected to exceed $1 trillion by 2030.
Taiwan is responsible for 60% of global production of chips measuring 7 nanometers or smaller. The island nation remains at the center of a geopolitical rivalry between the US and China.
The unprecedented growth in the semiconductor industry is attributed to rising demand for AI and high-performance computing, according to the International Data Corporation (IDC).
The IDC report predicts the global semiconductor industry will grow by 15% next year, as breakthroughs in cloud centers and other specialized industries are expected to spark a new boom in the sector.
The report also highlights that the production of 2-nanometer chips will define 2025, intensifying competition between Taiwan Semiconductor Manufacturing Company (TSMC), Samsung, and Intel.
Double-digit growth in the semiconductor industry is forecast for next year, despite challenges such as geopolitical risks, fluctuations in supply and demand, and the state of the global economy, according to the IDC.
Major players in chip business
Among the key players in the semiconductor sector, Nvidia stands out for its rapid progress in recent years. Founded in 1993, the US-based chipmaker is a relatively new entrant compared to its competitors.
Nvidia is renowned for its graphics processing units (GPUs), particularly the GeForce and RTX series, but its strides in AI have drawn significant attention.
Facing challenges to meet demand for data center orders, Nvidia achieved a record revenue of $35.1 billion in the third quarter of this year. The company currently commands 70% to 90% of the AI chip market, utilized in technologies such as ChatGPT, according to Mizuho Securities.
Nvidia’s market capitalization reached $3.4 trillion as of Wednesday.
Meanwhile, TSMC’s advanced semiconductors are highly sought after for high-performance computing, smartphones, mobile devices, and AI solutions. The company supplies chips to major clients, including Nvidia, Apple, and Broadcom.
In October, TSMC reported a 54% year-on-year increase in net profit, amounting to $10.1 billion, fueled by robust demand for AI chips. To enhance supply chain flexibility and meet regional demand, the firm is expanding globally, even as it remains embroiled in the US-China chip rivalry.
TSMC inaugurated its first production plant in Japan in February and announced a $4 billion investment in a German facility. Additionally, it plans to establish a plant in Arizona to produce Blackwell AI chips.
TSMC’s market capitalization totaled $1 trillion as of Dec. 25.
Broadcom is another significant player, known for its broadband modems and wireless networking solutions. The firm has partnered with industry giants such as Apple and TSMC.
Broadcom's shares increased by over 120% this year, bolstered by its AI offerings. In April, it acquired cloud software developer VMware. The company's market capitalization stands at $1 trillion, based on the latest data.
Dutch chipmaker ASML has emerged as Europe’s largest and most influential player in the industry, excelling in photolithography technology and 5G. Collaborating with TSMC, Nvidia, and Intel, ASML recorded revenue of €7.5 billion ($7.8 billion) in the third quarter, with a market capitalization of $286 billion.
Samsung, the South Korean tech giant, has made strides in storage technologies and processors for AI, cloud computing, and mobile gaming solutions. It collaborates with several American tech firms and plans to invest in US production facilities to address supply chain challenges. Samsung's market capitalization is $248 billion as of Wednesday.
In China, significant chip production is led by firms such as HiSense, Biren, and the Semiconductor Manufacturing International Corporation (SMIC).
For nearly a decade, the Chinese government has supported its domestic semiconductor sector through investment funds, grants, loan programs, and tax exemptions. The total value of these incentives is estimated to exceed $190 billion.
