[Tech Recap and Glimpse 5-5] Changes in the Landscape of the AI Chip Market After a Year of NVIDIA’s Dominance

Major Cloud Service Providers (CSPs) continue to see an increase in demand for AI servers over the next two years. The latest projections of TrendForce indicate a global shipment of approximately 1.18 million AI servers in 2023, with a year-on-year growth of 34.5%. The trend is expected to persist into the following year, with an estimated annual growth of around 40.2%, constituting over 12% of the total server shipments.

NVIDIA, with its key products including AI-accelerating GPU and the AI server reference architecture HGX, currently holds the highest market share in the AI sector. However, it is crucial to monitor CSPs developing their own chips and, in the case of Chinese companies restricted by U.S. sanctions, expanding investments in self-developed ASICs and general-purpose AI chips.

According to TrendForce data, AI servers equipped with NVIDIA GPUs accounted for approximately 65.1% this year, projected to decrease to 63.5% next year. In contrast, servers featuring AMD and CSP self-developed chips are expected to increase to 8.2% and 25.4%, respectively, in the coming year.

Another critical application, HBM (High Bandwidth Memory), is primarily supplied by major vendors Samsung, SK Hynix, and Micron, with market shares of approximately 47.5%, 47.5%, and 5.0%, respectively, this year. As the price difference between HBM and DDR4/DDR5 is 5 to 8 times, this is expected to contribute to a staggering 172% year-on-year revenue growth in the HBM market in 2024.

Currently, the three major manufacturers are expected to complete HBM3e verification in the first quarter of 2024. However, the results of each manufacturer’s HBM3e verification will determine the final allocation of procurement weight for NVIDIA among HBM suppliers in 2024. As the verifications are still underway, the market share for HBM in 2024 remain to be observed.

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(Photo credit: NVIDIA)