In the wake of a robust year for the semiconductor industry, recent analysis by Gartner indicates a collective 11 percent decline in revenues, totaling $533 billion. Despite an overall downturn, one notable exception emerges with NVIDIA, traditionally recognized for its graphics cards in the gaming sphere, securing a position among the top 5 companies boasting the highest annual revenue in the semiconductor sector.
NVIDIA’s remarkable achievement is underscored by an impressive sales surge of nearly 56 percent. This surge is attributed to the surge in artificial intelligence (AI) applications, fueled by the success of OpenAI’s ChatGPT and the subsequent heightened demand for AI-focused chips. Notably, NVIDIA had occupied the twelfth spot in annual revenue in 2022, making this ascent into the top 5 a significant milestone.
Conversely, industry stalwarts Samsung Electronics and Intel, which have historically vied for first and second place in chip manufacturers’ annual sales, experienced notable declines in their financial results. Samsung witnessed a substantial 38 percent reduction in revenue compared to the previous year, while Intel faced a 17 percent decrease. Among the top 10 semiconductor vendors, only Broadcom and STMicroelectronics managed to improve their sales figures from the preceding year, albeit with modest single-digit growth.
Gartner attributes the overall decline in semiconductor sales to oversaturation and lack of demand in specific segments, particularly in storage, encompassing PCs, servers, and smartphones. This segment saw a significant 37 percent decrease in revenue compared to 2022. However, beyond memory products, the market exhibited a more modest three percent contraction. Gartner analyst Joe Unsworth notes that the increased interest in AI solutions served as a robust growth driver, particularly evident in non-memory semiconductors. Unsworth adds, “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.”
