Breaking the 30-year pattern! NVIDIA's revenue this year may surpass Intel and Samsung Electronics, taking the top spot in the industry.

NVIDIA is expected to become the leader in the chip industry, surpassing Samsung Electronics and Intel with the help of the AI boom.

NVIDIA is poised to claim the crown of chip revenue. On December 26th, according to media reports, data from Benzinga Pro shows that NVIDIA is expected to generate $20.04 billion in revenue in the fourth quarter of this year. This figure not only exceeds market expectations but also surpasses the revenue forecast of TSMC, the semiconductor giant, for its own fourth quarter.

According to analysts from market research firm QUICK FactSet, NVIDIA is expected to achieve a record-breaking $58.86 billion in revenue for the fiscal year ending in January 2024, a year-on-year growth of 118%.

In comparison, Samsung Electronics' semiconductor division is expected to see a 34% decline in annual revenue to $49 billion. Intel's revenue for the same period is projected to decrease by 14.5% to $53.9 billion. AMD's annual revenue is expected to decline from $23.6 billion in 2022 to $22.63 billion.

This will make NVIDIA's revenue surpass Intel and Samsung Electronics, making it the new champion of the semiconductor industry.

Since the beginning of the year, NVIDIA's stock has surged by 234%, making it the best-performing stock in the S&P 500 index this year.

Benefiting from the AI boom, NVIDIA has emerged as a rising star. For a long time, Intel and Samsung Electronics have dominated the chip industry. According to market research firm Gartner, Intel has firmly held the top spot in semiconductor revenue from 1992 to 2017. Since 2017, Samsung Electronics has caught up and engaged in a battle for the crown of chip revenue with Intel. In 2022, Samsung Electronics claimed the throne of chip revenue.

However, the rapid development of artificial intelligence has changed this landscape. With the AI boom in 2023, NVIDIA has followed the trend and experienced a significant increase in chip sales, becoming one of the biggest winners in the US stock market. In contrast, the oversupply of memory chips in the past two years has led to a sharp decline in revenue for companies like Samsung Electronics. As a result, NVIDIA will soon take the leading position in this chip revenue competition.

The AI boom began with the popularity of ChatGPT, a chatbot powered by GPT. Thousands of NVIDIA AI accelerator chips provide operational support for most generative models. NVIDIA's revenue more than doubled to $10.3 billion in the second quarter, and its revenue increased by 206% to $18.12 billion in the third quarter, reflecting the strong demand for its AI chips in the market.NVIDIA is not content with the status quo. Despite having an advantage in AI chips, NVIDIA is not resting on its laurels as more and more competitors join the AI trend.

Earlier this month, AMD, one of NVIDIA's main competitors in AI chips, officially launched two flagship AI chip products, declaring their determination to directly compete with NVIDIA. Intel also announced this month that they will release a new AI chip in 2024 to enhance their competitiveness in the data center market.

In addition, the world's largest cloud operators are developing their own AI chips to reduce costs. Alphabet, the parent company of Google, Amazon, and Microsoft have recently announced their initiatives in this area. Starting from 2024, as more companies widely adopt generative AI, the cost competitiveness of chips will become even more important.

Currently, Google is already using internal chips to train its new generative AI model, Gemini. Eli Collins, Vice President of Product at Google DeepMind, revealed:

"Although this is our largest model, its service cost is much lower compared to previous large-scale models."

While analysts predict that these companies' custom AI chips may take away some market share from NVIDIA, they also acknowledge that NVIDIA's products will continue to be favored for their versatility and high performance, depending on the specific applications.