The global semiconductor market is expected to grow 13.1% in 2024 to a record $588.36 billion, following a slump this year, thanks to growing demand for chips used for artificial intelligence, according to a forecast by an industry organization.

The World Semiconductor Trade Statistics, an organization formed by major chip manufacturers, revised its growth forecast higher for the next year from the previous growth estimate made in June of 11.8%.

If realized, the market size in terms of billings will exceed the previous record of $574.08 billion in 2022. In 2023, the market is expected to decrease 9.4% to $520.13 billion due to weaker demand for memory chips.

The optimistic outlook comes as the industry has started to see signs of recovery in demand driven by widespread use of generative AI following the launch of ChatGPT, an AI chatbot developed by U.S.-based OpenAI, and improving sales of PCs and smartphones.

U.S. chip giant Intel said in October it will likely report its first revenue growth in two years in the October-December period. Rival firms Taiwan Semiconductor Manufacturing Co. and Samsung Electronics are also predicting better earnings in the period.

By product, memory chips will lead overall market growth in 2024, with its billings expected to jump 44.8% from a year earlier.

The market for logic chips is predicted to grow 9.6% while that of image sensor chips is expected to increase 1.7%.

By region, the Americas region is expected to see the biggest growth in 2024 with an outlook of 22.3% increase. The Asia-Pacific market, where many companies have their production sites for smartphones and PCs, is predicted to grow 12%.

Growth in the Japanese market is estimated to be a modest 4.4% as it will benefit less from the sharp demand recovery for memory chips due to a relatively smaller sales volume of the products in the country.