Processor industry: are chiplets everywhere?

Unveiling the processor market: a record 2021 led to a flat 2022, but the outlook for 2028 is bright.

OUTLINE:

• Processor revenue is expected to reach US$242 billion in 2028, with an 8% CAGR between 2022 and 2028.
• The processor market is largely dominated by a few key players: Intel, AMD, Nvidia, and Qualcomm, with these giants holding 54% of the total market share.
• Advanced generations of processors require more integrated circuitry, especially larger blocks of logic and SRAM[1].
• The surge in chiplet integration is driving 2.5D and 3D packaging growth by players like Intel, TSMC, AMD, NVIDIA, and Samsung.

The processor market had a remarkable year in 2021, achieving a historic high of US$155.5 billion with a robust growth rate of 22.3%. However, the following year, it experienced a slight downturn, with revenue settling at US$154 billion. The primary factor contributing to this decline was the CPU[2] segment, which was mainly impacted by reduced shipments in the PC category and increased competition from non-x86 APUs.

According to Adrien Sanchez , Technology & Market Analyst, Computing & Software, within the Semiconductor, Memory & Computing division at Yole Intelligence, part of Yole Group: “The GPU[3] market also experienced a minor contraction, dropping to US$22.6 billion in 2022. This decline was primarily attributed to decreased PC[4] GPU shipments and declining interest in cryptocurrency. Projections for 2023 anticipate a 3% recovery, reaching US$23.3 billion, driven by the growing trend of Generative AI[5].”

Conversely, the APU[6] market saw significant growth in 2022, and the data center sector exhibited substantial expansion, leading to a shift in revenue distribution. While the total revenue for processors is expected to reach US$242 billion by 2028, CPUs are expected to maintain their dominant position, GPUs are projected to experience significant growth, and data center is poised to emerge as the fastest-growing market.

In this context, Yole Intelligence releases its Status of the Processor Industry 2023 report. In this report, the company, part of Yole Group, gives a broad overview of the semiconductor processor industry, as well as an in-depth understanding of the market trends, ecosystem, and players and offers critical technical insights and analyses into future technology trends and challenges.

More advanced iterations of processors demand increased integration of circuitry, particularly larger blocks of logic and SRAM. In the past, progress toward denser logic was as straightforward as the next lithography shrink. However, as transistors continue to shrink in size, they have become more intricate and expensive to manufacture. In 2022, the industry is approaching the end of the finFET era, with gate-all-around architectures at 3nm and 2nm on the horizon.

“With the rising cost of designing at these nodes, there is a growing interest in alternative design and integration methods, such as chiplets.” asserts John Lorenz , Senior Technology and Market Analyst, Computing & Software at Yole Intelligence . “The concept of chiplets addresses the need for smaller, reusable designs using advanced packaging techniques. This surge in chiplet integration is fueling growth in 2.5D and 3D packaging.”

This evolution is led by major players like Intel, TSMC, AMD, NVIDIA, and Samsung. High-performance packaging platforms like Si interposers and hybrid bonding are becoming increasingly pivotal across various applications, reveals Yole Intelligence in this new report.

The processor market is largely dominated by a few key players: Intel, AMD, Nvidia, and Qualcomm, with these giants holding 54% of the total market share.

Competition is growing, with new entrants and tech giants like Amazon and Alibaba entering the CPU arena. Qualcomm, MediaTek, and Apple lead in APUs, with 32% of the market. The SoC FPGA and AI ASIC segments are led by AMD, Intel, and tech giants like Google and Amazon.

The processor startup landscape is dynamic, raising substantial funds, especially in AI-focused endeavors, with China leading the pack. The semiconductor industry in China is evolving, driven by investments and a growing ecosystem. In 2022, notable M&A activities included AMD's acquisition of Xilinx and Pensando, Intel’s failed attempt to acquire Tower Semiconductor, and Nvidia's abandoned bid for Arm.

Yole Intelligence’s Computing team invites you to follow the technologies, related devices, applications, and markets on www.yolegroup.com.

Do not miss the 2023 OCP Global Summit and Thomas Hackenberg , Principal Analyst, Semiconductor, Memory & Computing Division, at Yole Intelligence’s presentation. Ask for a meeting with our experts at Yole Group’s booth: [email protected].

[1] SRAM: Static Random Access Memory

[2] CPU: Central Processing Unit

[3] GPU: Graphic Processing Unit

[4] PC : Personal Computer

[5] AI : Artificial Intelligence

[6] APU: Application Processing Unit

Source: www.yolegroup.com