ASICs and Advanced Packaging to Reshape AI Chip Market

The global market for high-end cloud AI accelerators is on the brink of a significant shift, announced in a press release. Beginning in 2026, the industry will enter a "decentralized" phase driven by the expansion of custom ASICs, diversification of advanced packaging, and competitive pricing in high-bandwidth memory (HBM).

Custom ASICs are gaining traction over traditional GPUs, with cloud service providers like Google and Amazon developing in-house ASICs to better control performance and costs. This trend is expected to result in a compound annual growth rate of 21% for high-end cloud ASICs from 2025 to 2029, significantly outpacing the 7% growth rate for GPUs.

In the realm of advanced packaging, the dominance of TSMC is being challenged as non-TSMC suppliers like ASE, Amkor, and SJSemi increase their market share. By late 2026, these suppliers are projected to account for 31% of global CoWoS-class capacity. Intel is also advancing its EMIB technology to bolster its "made in America" position.

On the memory front, the adoption of HBM4 is anticipated to begin in 2026, with prices expected to be 53% higher than HBM3E. This will push memory's share of total costs above 50% for top-tier accelerators. Companies like Samsung are aggressively pursuing advanced process technology and price cuts to secure orders from major players like NVIDIA.

Overall, the AI accelerator industry is moving towards a more decentralized and competitive ecosystem, with strategic alliances and technology integration becoming crucial for companies to maintain their edge.