Turbulence in the market for some chip makers
Though global semiconductor chip sales declined in 2023 by about 11%, dropping from the previous year’s record of $574.1 billion to around $534 billion, that downturn did not last. Sales are expected to increase by 22% in 2025, according to Morales, driven by AI adoption and a stabilization in PC and smartphone sales.
“If you’re making memory or making an AI accelerator, like Nvidia, Broadcom, AMD or even Marvel now, you’re doing very well,” Morales said. “But if you’re a semiconductor company like an ST Micro, Infinium, Renesas or Texas Instruments, you’ve been hit hard by excess inventory and a macroeconomy that’s been uncertain for industrial and automobile sectors. Those two markets last year outperformed, but this year they were hit very hard.”
Most LLMs used today rely on public data, but more than 80% of the world’s data is held by enterprises that won’t share it with platforms like OpenAI or Anthropic, according to Morales. That trend benefits processor companies, especially Nvidia, Qualcomm, and AMD. Highly specialized System on a Chip (SoC) technology with lower price points and more energy efficiency will begin to dominate the market as organizations bring the tech in-house.
