By Latency, energy, privacy. By shifting AI computation from the cloud to the edge, these issues can be alleviated. 2025 was a breakout year for many AI applications, with consumer electronics leading the way in revenue due to the trend towards AI smartphones and PCs, and rising costs of chips manufactured on leading process nodes.
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In the new IDTechEx report, “AI Chips for Edge Applications 2026-2036: Technologies, Markets, Forecasts”,the conditions and trends that will unlock a US$80 billion market by 2036 are assessed, covering applications in the key regions of the US, Europe, China, and the rest of the world.
Cloud Waits. Edge Acts
Compared to cloud AI, performing AI computation at the edge is faster, and often greener (due to lower energy consumption) and more cost-effective. Without massive data transfer between the device and cloud, there are also data privacy advantages. The lack of dependency on the cloud or an active internet connection can be beneficial from a safety, performance, and convenience perspective, which is driving market demand for edge AI chips.
For autonomous vehicles, low latency and constant performance are vital for safety-critical manoeuvres, which could be required at any moment at superhuman reaction times.
For humanoid robots, AI compute is a requirement to run complex VLA (vision-language-action) models and drive complex parts such as robotic hands, which often have more than 20 degrees of freedom. For consumer electronics, edge AI unlocks new on-device features.
Like leading camera specs or CPU cores, AI capabilities are marketed as a key component in new smartphones and PCs in 2026. Throughout the next decade, IDTechEx expects consumer electronics to consistently maintain over 70% of the edge AI chip market.
Smaller Process Nodes and Greater Compute are Pushing the Smartphone Market
Reports of 2nm chips from TSMC wafers exceeding US$30,000 is indicative of the rising costs of AI hardware on consumer electronics hardware. Despite this, all leading flagship manufacturers, including Apple and Samsung, continue to market the new age of AI smartphones, where a chip, usually a neural processing unit (NPU), specialized for AI acceleration and inference, form part of the chipset.
These unlock local AI processing to achieve tasks such as live call transcription, generative photo editing, and personalized entertainment recommendations. IDTechEx estimates that approximately 25% of the 2025 smartphone market was made up of premium smartphones, where edge AI chips are emerging as a common feature.
Simultaneously, the mid-range phone market has recently been gaining market share, taking share away from budget phones. Over the next decade, AI chips will also become much more common in midrange smartphones, using chip architectures from flagships of previous years.
As the cost of AI hardware increases with demand for smaller process nodes and greater performance in terms of TOPS (tera operations per second), IDTechEx expects smartphone OEMs to sell an increasing share of midrange smartphones to absorb these increasing hardware costs.
Leading smartphones rely heavily on Qualcomm Snapdragon mobile platforms, while Mediatek has seen success in the low mid-range smartphone market. Apple and Google design their own chips that are manufactured by TSMC. Source: AI Chips for Edge Applications 2026-2036: Technologies, Markets, Forecasts.
AI PCs Will be the Norm in Five Years
IDTechEx defines an AI PC as one that has an NPU or other specialized AI chip with at least 40 TOPS in performance. The newest generation of chips, such as the Intel Panther Lake and Lunar Lake, satisfy this definition, which is the main reason that AI PCs will grow rapidly from 2026 to 2036.
At CES 2026, leading PC manufacturer Lenovo reiterated its commitment to AI PCs, claiming that 80% of new PC sales would be AI PCs after three years. As of 2026, not all PCs can be defined as AI PCs due to no AI specific chip or insufficient AI compute. However, by 2033, IDTechEx forecasts that virtually all new PC sales will be AI PCs, with further market increases driven by higher AI compute per PC and further cost increases at the foundry level.
IDTechEx analyzes the consumer electronics market, as well as edge AI chips in humanoid robots, automotive, and predictive maintenance sensors in its new report, “AI Chips for Edge Applications 2026-2036: Technologies, Markets, Forecasts”. Analysis of key players, benchmarking, and technology trends are used to produce granular geographical market size forecasts.
