While the semiconductor industry is estimated to end this year with a 10.9 percent decline in revenue, it’s expected to come roaring back in 2024 with a projected 16.8 percent increase for sales worldwide.

That’s according to research firm Gartner, which forecast earlier this month that while 2023 will end with $534 billion in global semiconductor revenue, it will more than make up the difference in the next year with $624 billion.

[Related: AMD Launches Instinct MI300 AI Chips To Challenge Nvidia With Backing From Microsoft, Dell And HPE]

While that’s mostly good news for the world’s largest semiconductor companies, such as Intel, TSMC and Nvidia, it’s a sign that some of the industry’s startups may have a better chance at winning customer orders to outfit state-of-the-art systems.

In the past year, the industry’s attention has become increasingly fixated on enabling and accelerating generative AI workloads thanks to the late 2022 launch of ChatGPT and other applications that require powerful and expensive chips to operate.

Nvidia may dominate the AI computing space, having tripled its revenue in the past quarter alone due to high AI chip demand. But that isn’t stopping a slew of semiconductor startup companies, such as Cerebras Systems, d-Matrix, Lightmatter and Tenstorrent, from fighting for their own slice of market share with novel chip architectures, processing techniques and business models.

The AI gold rush has also created a need for different kinds of semiconductor startups, like Astera Labs, Ayar Labs and Celestial AI, to help companies in the industry overcome memory and data transfer bottlenecks that are holding back applications from running faster than what current systems allow.

Semiconductor startups see opportunities in other areas too. These include Ampere Computing, whose Arm-based, cloud-native processors are winning over OEMs and cloud service providers, as well as EdgeQ, which is gaining momentum in the telecom space with its “Base-Station-on-a-chip.” There’s also Sim.ai, whose edge AI chip is entering mass production and going into systems from Supermicro.

What follows are CRN’s 10 hottest semiconductor startups of 2023, which consist of companies that have made a big splash this year for multiple reasons, including big funding rounds, product launches and momentum with customers and partners, among other milestones.

 Ayar Labs

Top Executive: Mark Wade, Co-Founder, CEO

Ayar Labs believes it can usher in a new era of high-performance chips with silicon photonics technology that moves data through chips using light instead of electricity.

The Santa, Clara, Calif.-based startup said in December that it had appointed co-founder and CTO Mark Wade as its new CEO as the company gears up to “meet the high-volume opportunity we see with in-package optical I/O,” according to investor Will Graves.

Wade’s appointment was made after Ayar in May said it had raised an additional $25 million funding for its Series C round, which brought the round’s total to $155 million. The startup’s investors include Nvidia, Intel Capital, Hewlett Packard Enterprise’s venture arm and GlobalFoundries.

The extra investment came after Ayar achieved multiple milestones. These included a demonstration of the industry’s first optical solution for delivering a connectivity speed of 4 Tbps, a partnership with the U.S. Department of Defense to prototype military applications using its optical I/O chiplets and lasers, and a collaboration with Nvidia to develop AI chips with optical I/O.