The semiconductor market began to rebound only in the second half of last year, so analysts tend to be cautious about its growth this year. In fact, both PC and smartphone segments are projected to experience a single-digit growth this year. However, there is a segment of the semiconductor market that is poised to grow by about 250% and this is AI accelerators, according to TSMC cited by TechNews.
TSMC estimates that the market of AI accelerators will grow by 2.5 times this year, the company revealed at its Technology Symposiums this spring. TSMC is, of course, particularly happy about this turn of events because the majority of AI processors tend to use advanced process technologies. Furthermore, TSMC produces more than 90% of AI processors as it makes Nvidia's GPUs for AI and HPCs, currently addressing over 80% of the AI accelerators market.
It should be noted that the majority of AI accelerators not only use silicon processed by TSMC, but they also require advanced packaging, such as TSMC's CoWoS. This means that the contract maker of chips earns quite a lot of money making those products for companies like AMD, AWS, Broadcom, Intel, Nvidia, Meta, or Microsoft.
Other segments of the semiconductor market are not expected to grow significantly this year, based on TSMC's expectations. For example, PC chips are poised to grow by just 1% to 3%, and smartphone chips are projected to grow by 1% to 3% as well, but Internet-of-Things products are forecasted to experience a 7% to 9% growth. By contrast, the automotive chip market is expected to decline by 3% to 1%.
The bigger picture of the semiconductor market looks quite favorable for TSMC. Excluding memory, the market is expected to grow by 10% this year to $650 billion, though this includes packaging, PMICs, and many other things. The foundry segment is forecasted to grow by 15% to 20% to $115 billion too (excluding Intel Foundry), so TSMC should feel pretty comfortable, especially as it grabs market share away from some of its rivals and is poised to keep doing so in the coming years as it expands both leading-edge and specialty technologies production capacities.
