Semiconductor Market Set for Robust Growth with AI Powering Surge

The global semiconductor market is projected to see substantial growth, reaching USD 630 billion in 2024 and USD 717 billion in 2025. AI demand and electronics recovery fuel this rebound following a 2023 decline, with significant contributions from the memory market and GPUs as key growth drivers.

The global semiconductor market is poised for a notable upswing, with projections estimating revenue will hit USD 630 billion in 2024, marking a 19% rise from the previous year. Gartner, Inc. reports suggest this momentum will persist, pushing revenue to an impressive USD 717 billion in 2025—an anticipated 14% increase.

Following a challenging downturn in 2023, this anticipated double-digit growth for the next two years signals a robust comeback. The resurgence is largely fueled by heightened demand for AI-focused semiconductors and a revival in electronics production.

Rajeev Rajput, Senior Principal Analyst at Gartner, stated, "The growth is driven by a continued surge in AI-related semiconductor demand and recovery in electronic production, despite ongoing weaknesses in the automotive and industrial sectors." The report emphasizes the memory market and graphics processing units (GPUs) as pivotal to near-term semiconductor revenue gains.

The memory market, particularly, is forecasted to grow strongly. By 2025, memory market revenue is expected to increase by 20.5%, reaching USD 196.3 billion. A continued undersupply in 2024 is anticipated to elevate NAND flash memory prices by 60%. A slight price adjustment by 2025 is predicted, with NAND flash revenue expected to be USD 75.5 billion, reflecting a 12% uptick.

Dynamic Random-Access Memory (DRAM) is set to make a substantial recovery, with 2025 revenues projected at USD 115.6 billion, up from USD 90.1 billion in 2024. This growth is underpinned by easing supply constraints, enhanced production of high-bandwidth memory (HBM), and increased demand for DDR5 technology.

The GPU sector, crucial for AI model training and development, also forecasts significant growth after a 2023 dip. A 27% increase in GPU revenue is anticipated in 2025, pushing figures to USD 51 billion. A notable rise in HBM demand for AI servers accompanies this growth.

George Brocklehurst, VP Analyst at Gartner, highlighted, "Vendors are investing significantly in HBM production and packaging to meet the memory requirements of next-generation GPU/AI accelerators." The semiconductor industry's future looks promising, with innovations in AI and memory technology serving as key growth catalysts.

(With inputs from agencies.)