Nvidia became the world's largest chip designer
Large revenue growth in the second quarter of 2023 helps Nvidia capture nearly 30% of the global chip market share, surpassing rival Qualcomm.
According to statistics from market research firm TrendForce, Nvidia achieved revenue of 11.332 billion USD in the last quarter, an increase of 68.3% compared to the first quarter of the year. During the same period, Qualcomm's revenue decreased 9.7% to $7.174 billion. Nvidia also surpassed many competitors such as Broadcom, AMD, and MediaTek to become the chip design company with the highest revenue in the world.
TrendForce assesses that the chip industry is benefiting from the global AI fever . Chip design companies achieved total revenue of $38.1 billion, up 12.5% from the previous quarter. Nvidia had the most breakthroughs as data center revenue increased 105% thanks to large shipments of high-performance HGX systems. In addition, the company's game and image support segment also developed strongly after launching a series of new products. Currently, the company accounts for 29.7% of the design market share.
Nvidia CEO Jensen Huang. Photo: Reuters
Meanwhile, Qualcomm , Nvidia's major rival, reduced revenue because demand for Android smartphones decreased. Apple signing a contract to purchase network chips is positive information, but does not help improve Qualcomm's business situation. As a result, the company's market share decreased from 23.5% to 18.8% in the second quarter of 2023.
Broadcom ended the quarter with revenue of nearly 6.9 billion USD, not much change compared to before. Although it also benefits from the AI trend, especially high-end switches and routers, the company still faces many difficulties in the server storage and broadband sectors.
AMD, Intel's rival in the computer chip segment, recorded revenue of 5.36 billion USD. The company was affected by falling sales of gaming GPUs and embedded chips. In contrast, MediaTek, after a period of inventory adjustment, saw growth thanks to products serving SoC and Wi-Fi TVs.
Companies are cautious in the third quarter of 2023. Despite positive inventory statistics, business may still decline due to reduced user demand. TrendForce assesses the opportunity that will arise as many private companies continue to pour money into large language modeling and generative AI . Besides, the leading chip design units can still achieve double-digit growth and reach record revenues in the near future.
TrendForce's ranking lists fabless chip designers, which are companies that design integrated circuits (ICs) but do not produce them directly but instead send them to foundries for production. These companies only focus on technology research, without investing in production infrastructure.
According to FT , Nvidia plans to ship 1.5-2 million H100 chips in 2024, several times higher than this year's target of 500,000 units. The company also predicts that demand for AI server chips will increase nearly 50% per year in the next five years. In the US, cloud computing service providers such as Microsoft, Amazon and Google are also shifting their development focus to building AI infrastructure .