It’s challenging to envision a repetition of the remarkable year the chip and technology sector experienced in 2023, but both financial and technology analyst groups almost universally agree that 2024 is poised to be just as impressive.
Driven by the increasing demand for computing power, especially with the surge of AI, chip companies are expected to witness another robust year in 2024, albeit with variations in the levels of success.
Key players in the data center and IT infrastructure markets played a pivotal role in fueling the AI surge in 2023, leading to higher valuations and nearly exhausting the chip supply. A substantial increase in silicon and infrastructure opportunities, ranging from 20% to 50%, is anticipated, benefiting a wide array of players.
Nvidia emerges as the leading player, experiencing over a 200% surge in stock price due to its dominance in data centers with GPUs powering intensive AI workloads. While competitors like Advanced Micro Devices (AMD) and in-house solutions from Microsoft, Alphabet, and Amazon are catching up, Nvidia’s market share might face some erosion. Nvidia aims to counter this by diversifying into new products and services, transforming into more than just a chip supplier.
AMD, with its MI300 family of GPUs, poses a significant challenge to Nvidia. CEO Lisa Su expresses confidence in this new chip, and it is expected to gain traction, offering high-performance, high-memory bandwidth chips for demanding AI workloads. AMD is also making strides in the data center CPU space, competing with Intel’s Xeon family.
Intel, with its next-generation Xeon processor and the Gaudi 3 AI processor, aims for a compelling 2024 in the data center segment. While Intel faces competition, especially from Nvidia’s GPUs, its custom AI architecture could provide unique advantages for specific workloads.
Cloud service providers, including Microsoft Azure, Google Cloud, and Amazon AWS, are anticipated to experience significant growth in compute utilization by AI companies. However, concerns about data security and privacy might lead to on-premises data centers handling some AI workloads, presenting opportunities for Dell Technologies and HPE.
In the client space, the impact of AI in personal computing is expected to create winners and losers. Microsoft, with its AI PC push, has the potential to redefine personal computing across devices, operating systems, and generative AI tools. Intel, AMD, and Qualcomm have been leading in the “AI PC” domain, with Intel launching Meteor Lake chips, AMD introducing improved Ryzen laptop chips, and Qualcomm unveiling Snapdragon X-series chips.
Nvidia, often overlooked in AI PCs, plans to emphasize its GPUs for high-performance AI processing. With significantly higher TOPS compared to integrated NPUs, Nvidia’s GPUs could cater to content creators, game developers, and other professionals seeking top-notch AI performance.
Three key unknowns for 2024 include the prevalence of AI processing in the cloud, at the edge, or on local devices, the adoption of custom silicon options from major tech companies versus traditional silicon providers, and the potential shift in Intel’s status as an integrated device manufacturer.
Tracking these unknowns will set the tone for the chip industry in 2024 and provide insights into the landscape for 2025.