The semiconductor market has returned to growth of late following a tough 2023 when the industry's revenue fell 8% to $527 billion thanks to the weak demand for smartphones and personal computers (PCs). semiconductor sales increased 11.6% in the fourth quarter of 2023, driven mainly by the strong demand for chips needed to train and deploy artificial intelligence (AI) models.

More specifically, the AI chip market generated almost $52 billion in revenue in 2023, accounting for almost 10% of the overall market based on the total revenue the industry logged last year. The AI chip market is projected to clock an annual growth rate of just over 40% through 2032, generating annual revenue of $1.11 trillion at the end of the forecast period.

So, the solid demand for AI chips is going to be a huge growth driver for the semiconductor market over the next decade. However, chipmakers haven't been able to keep up with the booming demand. Nvidia (NASDAQ: NVDA), for instance, saw such huge demand for its popular H100 AI graphics card that customers were waiting for as long as 11 months to receive the chip.

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Source Fool.com