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A Surge in Semiconductor Chip Demand – Forecasted for 2nd Quarter, 2024


The global semiconductor industry is poised for a rebound in semiconductor chip demand in the coming quarter of 2024 (from April to June). Experts predict that the upturn in demand, driven by AI-related data centers and the electric vehicle (EV) sector, will mark a crucial shift in the “silicon cycle” and contribute positively to the global economy.

A survey conducted by Nikkei, involving 10 organizations and individuals, including research agencies, analysts, and specialist trading companies, revealed insights into the supply and demand dynamics of semiconductors for each quarter of 2024.

Rise in Demand in AI Semiconductor

A significant catalyst for this surge in demand is the widespread adoption of generative AI across various industries.

Rise in AI Semiconductor chip demand

  • By 2026, 80% of companies globally will integrate generative AI into their business, a substantial increase from less than 5% in 2023 – Projected by Gartner, US research company
  • The AI semiconductor revenue is expected to reach $119.4 billion in 2027, constituting nearly 20% of the global semiconductor market – Indicated by Germany’s Statista.
  • “AI will be installed in smartphones and PCs. Generative AI-related investment will revitalize and significantly boost the growth of the semiconductor market,” said Akira Minamikawa of Omdia.

Rise in Demand in EV Semiconductor

“A high level of automotive semiconductor orders for EVs and advanced driver assistance systems will continue.” indicated by Ryoyo Electro, a semiconductor trading company.

Rise in EV Semiconductor chip demand

In addition to AI, the electric vehicle sector is expected to contribute to the semiconductor industry’s recovery in the second quarter of 2024. Automotive companies like BMW and Toyota have ambitious plans to increase EV sales, consisting of 50% market share by 2030, and reach 1.5 million-unit range by 2026, respectively.

This leads to a surge in demand for power semiconductors. Major semiconductor players, such as Infineon Technologies, Renesas Electronics are investing billions to build more semiconductor plants, expand production capacities for power semiconductors, anticipating a substantial increase in orders.

The second quater Q2 of 2024 is expected to experience a rise in global demand, especially in AI-related data centers and the electric vehicle (EV) sector.

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