The article emphasizes the indispensable role of semiconductors in the growth and functionality of artificial intelligence, likening the competitive landscape to historical power structures. With an estimated value of $133 billion, the industry comprises a limited number of major players, creating a tightly-knit environment where success in one area benefits all. Notably, five key companies dominate, generating 66% of total revenue. LAM Research, a leader in etching and deposition, has capitalized on the rise of AI by innovating in advanced packaging, experiencing a tripling of revenue in 2024, showcasing the dynamic interplay within this crucial sector.
While much of the hoopla surrounding Artificial Intelligence (AI) is focused on GPU companies like Nvidia and AMD, Semiconductors are the backbone of the digital architecture that creates cyberspace environments which allow AI to exist.
The semiconductor industry is estimated at $133 billion. There are only 2-3 major competitors for each vertical supplying an aspect of semiconductor technology, so a rising tide lifts all boats analogy is at work for the overall growth rate of the industry.
These 5 companies account for $93 billion in revenue, representing 66% of the semiconductor industry.
Advanced Packaging for increased semiconductor memory required to handle AI is a LAM Research specialty, and has already more than tripled its revenue generation in 2024.
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