Report: Artificial Intelligence (AI) chip sales to grow at 45.2% CAGR through 2025

Artificial intelligence
Allied Market Research projects global sales of AI chips to grow from $6.64 billion in 2018 to $91.18 billion by 2025, for a CAGR of 45.2%. (Pixabay)

Artificial intelligence (AI) is increasingly making inroads into many facets of our business and personal lives, and the numbers are there to prove it. In a recent Allied Market Research report titled, "Artificial Intelligence Chip Market," the global AI chip market is slated to grow from $6.64 billion in 2018 to $91.18 billion by 2025, for a robust CAGR of 45.2% during the forecast period.

According to the study, the rise in demand for smart homes & smart cities, surge in investments in AI startups and advent of quantum computing have boosted the growth of the global AI chip market. The rapid adoption of AI chips in the emerging countries and development of smart robots are expected to create numerous opportunities in the near future.

GPU chips accounted for the largest share of the AI market in 2018, accounting for roughly a third of sales, due to their extensive use in both commercial & scientific applications and increased demand for non-graphic applications such as general-purpose computing and programming languages & tools. However, the segment of other AI chips, including Neuromorphic Processing units (NPU) and Hybrid Chips, are estimated to grow at a 54.7% CAGR during the forecast period, as these chips are at the nascent stage of development and are expected to become mainstream in coming years, the study says.

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According to Allied Market Research, the robotics process automation segment is projected to exhibit of CAGR of 49.9% through 2025, owing to attractive features of AI robots such as enhanced accuracy, low technical barriers, improved productivity & reliability and consistency. Moreover, robotics process automation technology is applicable to processes that are generally routine, consistent, and prone to human error. However, the natural language processing segment dominated the market in 2018, contributing nearly one-third of the total revenue, owing to its wide range of applications such as chatbots that are designed to mimic human conversation.

The predominant AI chip packaging in 2018 was system-on-chip (SoC), garnering nearly 60% of sales, owing to compact design, increased demand for smart & power-efficient electronic devices, and surge in adoption of IoT. However, other technologies including package in package (PiP) and through-silicon via (TSV) are estimated to register the fastest CAGR of 55.5% during the forecast period, as PiP offers 3D integration along with exceptional performance suitable for AI applications. Moreover, TSV enables 2.5/3D package for high performance, low power consumption devices in mobile, wireless connectivity, and networking markets, which in turn, fuels the growth of the segment.

The study noted that North America accounted for more than one-third of the total revenue in 2018, reflecting technological advancements, ongoing R&D activities in autonomous vehicles, healthcare, cybersecurity, and security & access control, and growth in venture capital investments. However, the market across the Asia-Pacific region is expected to manifest the fastest CAGR of 49.7% through 2025. This is being attributed to advancements in algorithmic software systems in the Asia-Pacific region, along with the adoption of AI technologies by several large and mid-size markets in the region.

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