The global semiconductor market is set to grow 9.5% in 2025, driven by soaring demand for AI and data center chips, according to ING analysts. While this growth lags the 11.2% forecast by the World Semiconductor Trade Statistics (WSTS), it surpasses long-term industry projections by ASML.
AI-driven semiconductors are fueling market expansion, but traditional segments like PCs, smartphones, and automotive chips are under pressure due to weak consumer demand and pricing challenges. Despite NVIDIA (NASDAQ:NVDA) dominating the AI chip market, its latest earnings disappointed investors, while Samsung Electronics (KS:005930) lowered its AI semiconductor outlook. Meanwhile, Advanced Micro Devices (NASDAQ:AMD) reported $5 billion in AI chip revenue for 2024 and anticipates strong double-digit growth in 2025.
Taiwan Semiconductor Manufacturing Co. (TW:2330) predicts AI accelerator chips will grow at a compound annual rate of over 40% in the next five years, significantly outpacing its overall revenue expansion. Additionally, the industry is seeing a shift toward custom chips (ASICs) for data centers, benefiting companies like Broadcom (NASDAQ:AVGO) and Marvell Technology (NASDAQ:MRVL), but intensifying competition for Intel (NASDAQ:INTC) and AMD.
Although near-term memory chip pricing remains uncertain, strong demand for high-bandwidth memory and cutting-edge logic chips is positioning the semiconductor industry for sustained long-term growth.
