Dive Brief:
- Massive hyperscaler capacity buildouts drove up global semiconductor spending by 21% year over year to $793 billion in 2025, according to a Gartner report published Monday. AI processors contributed more than $200 billion to last year’s total and are expected to account for more than half of the market by 2029, the analyst firm said.
- The shift to AI infrastructure has shaken up the vendor hierarchy, helping Nvidia rocket to the top with 15.8% of the global market and more than $125 billion in revenue last year. The GPU giant surpassed Samsung Electronics, which captured the second largest share, by $58 billion in annual revenue, the report found.
- “AI semiconductors — including processors, high-bandwidth memory, and networking components continued to drive unprecedented growth in the semiconductor market, accounting for nearly one-third of total sales,” Rajeev Rajput, senior principal analyst at Gartner, said in the release. “This domination is set to rise as AI infrastructure spending is forecast to surpass $1.3 trillion in 2026.”
Dive Insight:
The race to deploy AI processing power has already left its mark on the semiconductor industry, which saw year-over-year revenue drop 11% in 2023 to less than $550 billion. Memory chip producers endured a particularly rough patch that year, with the segment recording one of its steepest declines in history, according to Gartner.
Nvidia’s rapid ascent from the fifth largest vendor two years ago to its current leading position was mirrored by Intel’s descent. The once dominant CPU producer held the largest market share in 2023, despite its revenue dropping 17% year over year to less than $50 billion, as Nvidia grew its revenue by more than 50% to nearly $24 billion.
The GPU boom, which stoked fears of an AI silicon shortage early last year, led to an ongoing scarcity of memory chips that surfaced during the final three months of 2024. HPE President and CEO Antonio Neri said the company expects DRAM and NAND Flash costs to continue to increase this year during a December earnings call.
“We are monitoring the DRAM and NAND markets daily and taking mitigating actions to preserve our margins,” HPE VP and CFO Marie Myers said on that call. “This includes partnering with our suppliers, taking pricing actions and working with our customers to shape demand.”
The shortage may undercut tech industry hopes for a surge in AI PC sales this year, according to IDC analysts. But the development has helped boost the fortunes of Korea-based semiconductor supplier SK Hynix, which rose to the third position in Gartner’s rankings with more than $60 billion in 2025 revenue marking a 37% increase over the prior year.
SK Hynix’s boost was tied to its leading position in the high bandwidth memory chips, Rajput told Channel Dive. “HBM demand is fueled by GPUs for AI. The shortages in the last few months certainly helped the prices and most vendors gained from it, especially in Q4.”
Once mighty Intel saw its revenue drop nearly 4% during last year’s chip spending spree. Now the fourth largest supplier by Gartner’s rankings, the company introduced its Core Ultra Series 3 chips to support AI workloads during the CES 2026 electronics trade show in Las Vegas last week.
Intel, which got a $5 billion infusion from Nvidia in September, is pinning its hopes — and the perseverance of its workhorse x86 processor — to the AI PC.
“With Series 3, we are laser focused on improving power efficiency, adding more CPU performance, a bigger GPU in a class of its own, more AI compute and app compatibility you can count on with x86,” Jim Johnson, SVP and GM of Intel’s Client Computing Group, said in the announcement.
