Global AI Chips Market in Smartphones Poised for Significant Growth Despite Saturation Challenges

 
The latest market research from IDTechEx, titled “AI Chips for Edge Applications 2024-2034: Artificial Intelligence at the Edge,” forecasts a robust growth in the global AI chips market for edge devices, predicting it to reach US$22 billion by 2034. The consumer electronics sector is expected to be the major beneficiary, claiming over 45% of this revenue.
AI technology has already made substantial inroads in various devices, including smartphones, tablets, smart speakers, personal computers, and televisions. The next few years are set to witness an increased deployment of AI chips in edge devices within homes, shaping the way people interact with their environments and creating a more localized Internet of Things.
The smartphone market, a critical segment for AI adoption, is currently experiencing saturation. This trend limits further uptake of AI technologies, posing a unique challenge for the industry. Despite this, the market dynamics within the smartphone chipset segment reveal interesting developments.
The chipset landscape for mobile devices is dominated by a duopoly of Qualcomm (US) and MediaTek (Taiwan), along with tech giants like Apple and Google, who design chipsets for their devices. Samsung, a major player, recently signaled a shift in its approach to chipset design. Reports in late 2022 and early 2023 indicated a possible discontinuation of its Exynos line, with the latest Galaxy S23 using a Qualcomm Snapdragon chipset instead. This move suggests a potential change in Samsung’s strategy regarding its proprietary chipsets.
Meanwhile, in China, Oppo, a leading smartphone maker, decided to shut down its semiconductor division, Zeku, as reported in May 2023. Set up in 2019 for in-house chip design, the division’s closure is attributed to tighter production margins and US restrictions on chips using American IP. This development indicates a likely reliance on Qualcomm and MediaTek chipsets in Oppo’s future products.
The global smartphone market, however, is not just about these technological shifts. In 2022, there was a 10% decrease in smartphone shipments compared to 2021, underscoring the saturation in various national markets. Despite this downturn, the demand for premium smartphones continues, a trend termed ‘premiumization.’ This shift is significant as most premium smartphones incorporate AI coprocessing capabilities. While only 17% of the top 20% of smartphones sold in 2022 had AI coprocessing, this is set to increase as premium smartphones gain a larger market share, especially in developing economies.
IDTechEx’s report not only delves into the smartphone sector but also offers a comprehensive analysis of the AI chips market across eight industry verticals. It provides detailed forecasts and examines key drivers for revenue growth in edge AI chips over the next decade, covering consumer electronics, industrial automation, and automotive sectors. The report is a valuable resource for understanding the current trends, challenges, and opportunities in the edge AI chip market.
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