• Samsung ranked first in the global semiconductor market in Q3 2024, driven by strong demand in the memory sector, especially for DDR5 and storage solutions optimized for GenAI.
• NVIDIA’s Q3 2024 revenue surged 94% YoY, driven by its leadership in AI and increased sales in the data center segment.
• The major revenue driver in the upcoming quarter is expected to be the AI boom and rising memory requirements.
• Due to weak demand in Europe and the region’s slowing shift to EVs, a rebound in the automotive industry is expected to take longer.

The global semiconductor industry’s Q3 2024 revenue rose 17% YoY to reach $158.2 billion, largely fueled by demand for artificial intelligence (AI) technologies and a recovery in the memory sector. NVIDIA and AMD emerged as major winners in the AI sector, witnessing notable growth in their AI-related business segments. This trend is projected to persist with the introduction of new products in Q4 2024. In the memory sector, companies like Samsung, SK Hynix, and Micron saw double-digit YoY percentage increases in sales, bolstered by production cuts and rising demand for generative AI storage solutions.

Q3 2024 marked a recovery period for semiconductor companies, after navigating a tough environment with weak consumer demand in H1 2023 by effectively managing their inventory levels. Looking ahead, demand for semiconductor content is expected to increase in Q4 2024, driven by the evolving computing requirements for AI chips and memory.

Counterpoint's semiconductor revenue tracker indicates that most companies enjoyed strong quarterly results in Q3 2024, largely fueled by the ongoing AI boom. However, the automotive sector continues to face challenges, with varying YoY revenue declines reported among the companies under observation due to the ongoing destocking process. Additionally, the top 22 global semiconductor vendors accounted for 73.1% of the market, unchanged from the year-ago period. This data reflects the overall resilience and adapting strategies of semiconductor firms in a fluctuating market environment.

Source: Counterpoint

Samsung notably reclaimed its position as the leader in semiconductor revenue rankings, rising 18% YoY. Meanwhile, SK Hynix and Micron reported remarkable revenue increases of 94% YoY and 93% YoY, respectively. Samsung’s memory chip division benefited from strong demand for both AI and traditional servers. Similarly, SK Hynix and Micron experienced growth driven by high demand for HBM, which helped improve their margins to some extent.

NVIDIA’s Q3 2024 revenue surged 94% YoY, helping the brand secure the seventh overall ranking. The growth was due to NVIDIA’s dominant presence in the market for GPUs utilized in AI and high-performance computing. Looking ahead, we expect NVIDIA to continue to excel in AI, as its Blackwell production shipments are set to start in the Q4 2025 and are expected to ramp up into fiscal 2026.

In contrast, Intel encountered difficulties, with its Q3 2024 earnings falling 6% YoY due to significant restructuring expenses and a major cost-cutting initiative. Additionally, the company faced substantial impairment charges, primarily linked to accelerated depreciation of its Intel 7 process node manufacturing assets and goodwill impairment in the Mobileye division, which severely hurt its margins. Intel has struggled with its core businesses and has been unable to make significant strides in AI, despite efforts to transform its foundry business into an independent subsidiary. This strategic shift is expected to require time before yielding positive outcomes.

The automotive industry has been grappling with significant challenges that have resulted in revenue declines across a broad spectrum due to ongoing destocking processes and weak sales. Key players such as STMicroelectronics, Infineon, and Texas Instruments have reported notable declines in revenue, hurt by heightened competition in China and decreasing demand for electric vehicles (EVs). This situation underscores the sector's struggle to adapt to the changing market dynamics and consumer preferences, which are likely to continue influencing performance in the short term.

Looking ahead, AI technologies, including servers, PCs, and smartphones, are expected to remain major revenue drivers. The memory sector is poised to benefit from the increased demand for storage solutions linked to AI advancements, e.g. HBM. However, the recovery of the automotive industry may remain slow due to existing inventory adjustments and market challenges.