A new study of McKinsey exposes in depth the impacts of artificial intelligence (AI) on the semiconductor industry. Entitled "Silicon Squeeze: AI's Impact on the Semiconductor Industry", the report reveals how the explosive growth of AI is reshaping the industry’s value and competitiveness dynamics.
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Between 2010 and 2019, the sector's economic profit jumped from US$38 billion (in the 2000s) to US$450 billion. With the arrival of Generative AI and the increase in demand for specialized chips, profits jumped again: US$ 473 billion between 2020 and 2024. However, this growth is increasingly concentrated in the hands of a few: in 2024, the top 5% of players — such as Nvidia, TSMC, Broadcom and ASML — were responsible for virtually all of the industry's profits, while the remaining 95% faced stagnation or losses.
The study shows that, although the sector appears to have recovered from the crisis between 2022 and 2024, the reality is harsher for most companies. Without Nvidia's influence, signs of recovery disappear. In addition, high inventories persist, and competition with Chinese companies intensifies — China jumped from 6% to 38% of global revenue in semiconductor equipment between 2010 and 2024.
The outlook until 2030 is ambiguous: The market is estimated to reach $1,3 trillion, driven by AI. However, this growth will be uneven. Companies with a strong presence in AI could grow by up to 29% per year, while others — without a significant presence in the sector — could face growth of less than 3% per year.
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McKinsey's message is clear: to thrive, it will take more than advanced chips. Companies will have to reinvent business models, diversify portfolios, seek adjacencies and, most importantly, use AI to transform their own operations. The future of the industry will not only depend on the technology it produces, but on the ability to use it internally to innovate and survive in an increasingly competitive and volatile environment.
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