AI Boom Propels NVIDIA into Semiconductor Top 5

After a banner year for the semiconductor industry, revenues dropped by 11 percent to $533 billion, according to a recent analysis by Gartner. Almost no chip manufacturer improved its results year-on-year - with one clear exception.

NVIDIA, previously best known to video gamers for its graphics cards, made it into the top 5 companies with the highest annual revenue in the semiconductor segment for the first time this year with a sales increase of almost 56 percent. This can be attributed to the AI boom of the past year, driven by the success of OpenAI's ChatGPT and the resulting increase in demand for chips geared towards AI applications. In 2022, NVIDIA was still in twelfth place in annual revenue.

In contrast, the financial results of Samsung Electronics and Intel, which have alternated in first and second place among the chip manufacturers with the highest sales numbers for years, significantly worsened. Samsung, for example, lost around 38 percent of its revenue compared to the previous year, compared to 17 percent for Intel. Alongside NVIDIA, only Broadcom and STMicroelectronics in the top 10 semiconductor vendors improved on the sales front compared to their previous year, albeit only in the single-digit range.

According to Gartner, the decline in sales is primarily due to oversaturation or a lack of demand in the storage segment, for example for PCs, servers and smartphones. The corresponding segment generated 37 percent less revenue than in 2022. Outside of memory products, the market only shrank by three percent, which, according to Gartner analyst Joe Unsworth, is also due to the increased interest in AI solutions. "The demand for non-memory semiconductors for AI applications was the strongest growth driver, with the automotive sector (especially electric vehicles), defense and aerospace industries, also outperforming most other application segments," Unsworth said.