26 Jun 2023 -

AI applications are rapidly growing and driving IC Design Houses – TrendForce


TrendForce reports that with new product releases and a surge in urgent orders for specialised specifications, Q1 revenue of the global top ten IC design houses remained on par with 4Q22 – even increasing 0.1% to a total revenue of US$33.86 billion. 

While Q1 showed signs of subdued demand, and inventory reduction fell short of some expectations, TrendForce said this coincided with the industry’s traditional off-season.

AI applications are entering a period of rapid growth

Nvidia experienced significant growth this quarter, fueled by an explosive surge in demand for generative AI and cloud computing, alongside the introduction of the RTX 40 series. The company’s revenue from gaming and data centers saw a quarterly increase of 20% and 10%, respectively. This propelled Nvidia’s Q1 revenue by 13.5%, reaching US$6.73 billion and elevating its market share to close to 20%. 

Qualcomm witnessed an uptick in its revenue, largely attributed to the launch and subsequent shipments of its latest flagship chip, the Snapdragon 8Gen2. The company saw 6.1% in QoQ growth in its smartphone business, which effectively offset the downturn from its automotive and IoT sectors. As a result, Qualcomm’s Q1 revenue increased marginally by 0.6%, cementing its position at the top of the pack with a market share of 23.5%.

Looking ahead to the next quarter, although IC inventory clearance has been slower than anticipated, it has gradually rebounded to a healthier level in contrast to the period of excess inventory in 2H22. Simultaneously, the introduction of new products may stimulate positive growth for some IC design houses. 

Nvidia, in particular, is one to watch. The rapid global deployment of AI chips—championed by CSPs and businesses, and stimulated by the rising popularity of generative AI technologies like ChatGPT—is expected to trigger a swift revenue surge. Given these dynamics, it’s likely that Nvidia may rise to become the dominant IC design house in 2Q23. This potential growth could not only boost Nvidia but also inspire a resurgence among the top ten global IC design houses, leading to a recovery from the market downturn.

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