According to the latest forecast from Gartner, the global semiconductor industry is set to reach roughly £41bn ($53 billion) in revenue in 2023, marking an increase of around 20.9% over 2022.

The demand for AI semiconductors, or chips — which include specialised graphics processing units (GPUs), application-specific integrated circuits (ASICs), and field-programmable gate arrays (FPGAs) — is increasing due to their ability to efficiently execute artificial intelligence workloads.

Amid the international push for AI computing power, the technological research and consulting firm also predicts that worldwide AI semiconductor industry revenue will increase by approximately 25.6% to around £52bn ($67.1bn) in 2024.

Further, by 2027, it’s expected that AI semiconductor revenues will be more than double the size of the market in 2023, hitting roughly £93bn ($119.4bn).

As Alan Priestley, VP analyst at Gartner, said: “The developments in generative AI and the increasing use of a wide range AI-based applications in data centers, edge infrastructure and endpoint devices require the deployment of high performance graphics processing units (GPUs) and optimized semiconductor devices. This is driving the production and deployment of AI chips.”

Priestley also noted that “For many organizations, large scale deployments of custom AI chips will replace the current predominant chip architecture – discrete GPUs – for a wide range of AI-based workloads, especially those based on generative AI techniques.”

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Semiconductors, semiconductor firms, and the UK

The latest Gartner forecast comes during a series of notable semiconductor-related developments pertaining to the UK.

Arm, the Cambridge-based chip designing giant that’s been described as the “crown jewel” of the UK’s technology industry, has today officially filed paperwork to sell its shares in the US — delivering a consequent blow to the London Stock Exchange and the UK.

The semiconductor design firm, which was founded in 1990, has over the decades developed and licensed what it describes as high-performance, energy-efficient, and low-cost chips. Some analysts expect Arm’s initial public offering (IPO) to be the biggest of 2023.

Just yesterday, on 21 August, DIGIT also covered reports that the UK Government is to spend up to £100 million on procuring high-powered chips for the development of AI technologies through a national “AI Research Resource.”

In a comment made to DIGIT, a spokesperson for the Department of Science, Innovation, and Technology said: “We are committed to supporting a thriving compute environment which maintains the UK’s position as a leader across science, innovation and technology.

“The funding for the AI Research Resource is part of our £900 million compute investment, as announced in the Spring Budget and which will be delivered by UKRI.

“No decisions have been taken on who will provide hardware for the Resource, and further announcements will follow in due course.”

The reports of the procurement come just months after an independent review into the UK’s computing abilities, which noted that “The UK has great talent in AI with a vibrant start-up ecosystem, but public investment in AI compute is seriously lagging.”

A UK Government official apparently briefed on the UK Government’s chip procurement plans reportedly told the Guardian that the £100m figure is far too low compared to investment from the likes of the EU, US, and China.