Asia-Pacific AI Chip Market Outlook to 2030

Asia-Pacific AI Chip Market Overview

• The Asia-Pacific AI Chip Market is valued at USD 5.4 billion. The market's growth is driven by the increasing adoption of AI technologies across various sectors, such as healthcare, automotive, and financial services. Additionally, government initiatives promoting AI innovation, coupled with the rise in AI-powered applications, are boosting the demand for AI chips in the region.
• Key players in the Asia-Pacific AI Chip Market include NVIDIA Corporation, Intel Corporation, Qualcomm Technologies Inc., Huawei Technologies Co., Ltd., and MediaTek Inc. These companies focus on developing cutting-edge AI chips to enhance computing power, energy efficiency, and edge computing capabilities.
• Nvidia is reportedly set to launch a new AI chip, potentially named B20, for the Chinese market, with mass production starting later this year. However, concerns remain over U.S. export controls, which could impact its availability and shipment timelines.
• In 2023, China led the Asia-Pacific AI Chip Market, driven by its large-scale AI investments and robust semiconductor industry. Japan and South Korea followed closely, leveraging their technological expertise and strong industrial base in AI-related applications.

Asia-Pacific AI Chip Market Segmentation

The Asia-Pacific AI Chip Market is segmented by chip type, application, and region.

• By Chip Type: The market is segmented into GPU, ASIC, FPGA, and CPU. In 2023, GPU dominated the market due to its advanced parallel processing capabilities, crucial for AI workloads.

• By Application: The market is segmented into data centers, autonomous vehicles, healthcare, and smart devices. The data center segment held the largest market share in 2023, attributed to the growing demand for AI-driven cloud computing services.

• By Region: The market is segmented into China, Japan, South Korea, India, Australia, and the Rest of APAC. China accounted for the highest market share in 2023, driven by rapid AI advancements and supportive government policies.

Asia-Pacific AI Chip Market Competitive Landscape

• Intel Corporation: Intel is carving out India as a separate geographic region, betting big on the country's growth potential driven by AI and the 'Siliconomy'. The company aims to provide AI-enabled processors for up to 100 million PCs by 2025 to democratize access to innovative machines.
• Qualcomm Technologies Inc.: Qualcomm has landed projects with Toyota and FAW's Hongqi for its Snapdragon Ride autonomous driving chip, highlighting its cost-effectiveness amid competition from Nvidia and Horizon Robotics. Mass production may begin by late 2024 for Hongqi and 2025 for Toyota

Asia-Pacific AI Chip Market Analysis

Asia-Pacific AI Chip Market Growth Drivers:

• Rising AI Adoption: Increasing deployment of AI technologies in sectors such as healthcare, automotive, and manufacturing is driving demand for AI chips. China sold over 5 million AI-powered devices in 2023, showcasing the growing adoption.
• Expansion of AI Infrastructure: Governments in the Asia-Pacific region are heavily investing in AI research and infrastructure, which enhances market growth. In 2023, South Korea allocated over USD 500 million to AI infrastructure, reflecting a strategic commitment to fostering innovation and supporting the burgeoning AI ecosystem.
• Edge Computing and AI Chips: As AI applications move towards edge computing, demand for AI chips with low-latency processing and energy-efficient features is rising. In 2023, AI chips for edge computing accounted for 25% of the market.

Asia-Pacific AI Chip Market Challenges:

• High Manufacturing Costs: Developing advanced AI chips is capital-intensive, with research and design costs soaring from around $28 million at the 65 nm node to about $540 million at the 5 nm node. Additionally, fab construction costs increased from $400 million to $5.4 billion for the same nodes.
• Data Privacy Concerns: As AI chips process vast amounts of sensitive data, the risk of data breaches rises. In regions like Japan and South Korea, stringent regulations require companies to implement robust data security measures, with 79% of organizations citing data privacy as a substantial concern when adopting AI technologies.

Asia-Pacific AI Chip Market Government Initiatives:

• Chinas AI Development Plan: As part of its national strategy, China aims to become the world leader in AI by 2030. The governments plan involves substantial investments in AI chips and related technologies, with over USD 2 billion allocated for AI R&D in 2023.
• Japans AI Innovation Strategy: Japans government is promoting AI through its AI Society 5.0 initiative, this initiative includes a goal to train 250,000 AI specialists by 2025, ensuring that Japan has the necessary talent to support its ambitious AI integration and development plans, enhancing its competitive edge in the market.

Asia-Pacific AI Chip Future Market Outlook

The Asia-Pacific AI Chip Market is expected to grow steadily over the next five years, driven by the continued adoption of AI and cloud computing technologies. SaaS is predicted to dominate the market, with companies increasingly opting for subscription-based AI chip services. The rise of edge computing, 5G, and the Internet of Things (IoT) will further propel market growth.

Asia-Pacific AI Chip Future Market Trends:

• Increased Adoption of AI in Autonomous Vehicles: In the next five years, AI chips designed for autonomous vehicles will see substantial growth, with expectations that they will account for a substantial portion of the market. This trend reflects the automotive industry's increasing reliance on AI technologies for enhancing vehicle safety and operational efficiency.
• Advancements in Quantum Computing: Over the next five years, quantum AI chips will emerge as a substantial trend, particularly in countries like China and Japan. These chips will offer faster computing power for complex AI models, enabling advancements in AI applications and aligning with national strategies to develop high-efficiency computing technologies for future innovations.