CPU, Memory, Storage Semiconductor Market Booming Due to Increased AI Agent Demand

The semiconductor industry is witnessing an unprecedented surge, moving beyond the initial GPU-centric AI boom to encompass a wider array of components including CPUs, memory, and storage. As highlighted by Dong-A Ilbo, the emergence of 'AI agents' is creating a new wave of demand, leading many semiconductor firms to post financial results that surpass market forecasts.

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AMD CEO Lisa Su.

AMD, a key player in this transformation, reported a significant 39% increase in first-quarter revenue and a 72% jump in operating profit year-over-year. Their optimistic outlook for the second quarter, projecting revenue between $10.9 billion and $11.5 billion, sent their stock soaring. This success is largely attributed to the structural rise of agent-based AI, which requires a substantial increase in CPU processing power for task coordination and data management, effectively doubling the need for CPUs in AI server configurations.

The positive trend is not limited to AMD. NAND flash specialist SanDisk saw its stock jump nearly 12% after reporting a threefold increase in first-quarter revenue and substantial operating profit, a remarkable turnaround from previous losses. Similarly, Western Digital, traditionally known for HDDs, experienced a 44% revenue and 57% profit increase, driven by the explosive demand for large-scale data storage necessary for AI training and inference.

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As AI infrastructure investment expands from existing graphics processing units (GPUs) to central processing units (CPUs), memory, and storage, semiconductor companies that have received less attention are successively releasing performance exceeding market expectations.

Even analog chip manufacturers like Texas Instruments (TI), crucial for power management and signal conversion in AI data centers, are benefiting. TI's first-quarter revenue and operating profit rose 17% and 37% respectively, with its stock surging over 19%. This broad-based growth across CPU, NAND, HDD, and analog segments indicates a healthy expansion of the semiconductor market, building upon the earlier success of memory giants like Samsung, SK Hynix, and Micron in the HBM sector.

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The emergence of 'AI agents' as a new demand is broadening the base of the semiconductor industry's upturn.

From our perspective in South Korea, this diversification of AI's impact is particularly noteworthy. While global media often focuses on the GPU giants, the success of companies like AMD and the resurgence of storage providers demonstrate the systemic nature of the AI revolution. It signifies a maturing market where innovation is spreading across the entire value chain, creating opportunities for a wider range of players and reinforcing South Korea's position as a leader in advanced technology.

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AMD reported first-quarter revenue of $10.3 billion (approximately 15 trillion won) and operating profit of $1.476 billion (2.15 trillion won), increases of 39% and 72% respectively compared to the same period last year.