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Why is the Machine Learning Chips Market Expected to Grow by USD 22,276.52 Million?

TL;DR

  • The market for machine learning chips is expected to increase by USD 22,276.52 million between 2022 and 2027, with a CAGR of 30.91%.
  • North America is expected to lead the market, accounting for 46% of the global share during the forecast period, driven by increasing investments in autonomous vehicles.
  • The BFSI sector is witnessing significant demand growth for machine learning chips as AI adoption transforms customer engagement and enhances services like claims processing and policy renewal.

In a recent report by Technavio, the machine learning chips market is projected to experience remarkable growth, expanding by USD 22,276.52 million from 2022 to 2027, with a compound annual growth rate (CAGR) of 30.91%. The market is expected to witness a surge in demand and adoption during the forecast period, with North America leading the global market, accounting for 46% of the share. The key driver behind this growth is the widespread adoption of machine learning chips in autonomous vehicles, which heavily rely on advanced electronic components for real-time data processing. Technological advancements and the integration of machine learning chips in various industries are also contributing to the market’s growth.

Machine learning chips market – segmentation assessment

Under the market segmentation, Technavio has categorized the machine learning chips market based on end-users, technology, and geography. The Banking, Financial Services, and Insurance (BFSI) segment are expected to experience significant growth during the forecast period. The BFSI industry has witnessed a transformation with the introduction of machine learning chips. Integrating AI technologies in various marketing technologies like Data Management Platforms (DMPs) and Customer Data Platforms (CDPs) has revolutionized customer engagement across digital channels. This, in turn, has led to increased online revenue and improved customer interactions.

Technavio’s analysts have highlighted the significant impact of these trends in North America, where investments in autonomous vehicles have been on the rise. The integration of advanced Human-Machine Interface (HMI) technologies and advancements in wired and wireless communication for automotive applications further bolster the market’s growth during the forecast period. This growth in North America is expected to cascade to the global machine learning chips market.

In the insurance sector, AI-powered machine learning chips have shown immense potential in reducing operating costs and enhancing customer satisfaction in services like policy renewal and claims processing. These elements are projected to fuel the BFSI industry’s need for machine learning chips and boost the market’s expansion over the course of the projection timeframe.

Machine learning chips market dynamics

The primary factor driving the growth of the machine learning chips market is the adoption of these chips in autonomous vehicles. As the automotive industry races towards achieving higher levels of vehicle automation, the demand for machine learning chips has surged. The complex systems in autonomous vehicles, including sensors, cameras, radar, LIDAR, and ultrasonic instruments, generate vast amounts of data that require high-speed processors to analyze the unstructured data and make real-time decisions. Advanced Driver Assistance Systems (ADAS) powered by deep learning algorithms provide advantages such as object recognition, power efficiency, prediction, and improved perception.

The increasing investments in autonomous vehicles present lucrative opportunities for vendors to expand their market presence and revenues. As a result, the global machine learning chips market is expected to witness significant growth during the forecast period.

One of the prominent trends shaping the machine learning chips market is the increasing investments in AI start-ups. With the widespread adoption of AI technology across industries, many start-ups have emerged to capitalize on the growing demand for AI solutions. These start-ups are receiving substantial investments from venture capitalists and major chip manufacturers for AI platform and chipset development.

For instance, Shanghai-based start-up Innostar Semiconductor secured funding of USD 100 million to develop storage and resistive RAM chips, while Tessolve received USD 40.0 million to expand its chip and ASIC design business and embedded service offerings. These significant investments in AI start-ups are expected to drive the market’s growth during the forecast period.

One of the major challenges the machine learning chips market faces is the semiconductor industry’s cyclical nature. Fluctuations in demand for electronic products, such as consumer electronic devices and mobile devices, can lead to oversupply or undersupply of semiconductor ICs, impacting the capital spending and manufacturing capacity of machine learning chip manufacturers. High inventory and manufacturing costs, coupled with inaccurate forecasts or order cancellations/delays, can adversely affect vendors’ operations, resulting in significant losses.

Machine learning chips market set for robust growth

The machine learning chips market is poised to witness substantial growth during the forecast period, primarily driven by the increasing adoption of these chips in autonomous vehicles. North America is expected to lead the market, with significant contributions from the BFSI industry. While increasing investments in AI start-ups provide opportunities, challenges stemming from the cyclical nature of the semiconductor industry may hinder market growth. But, with continuous technological advancements and growing demand for AI-powered solutions, the machine learning chips market is on track for a promising future.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions

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Aamir Sheikh

Amir is a media, marketing and content professional working in the digital industry. A veteran in content production Amir is now an enthusiastic cryptocurrency proponent, analyst and writer.

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