Semiconductor Industry Size, Share & Trends

As technology continues to grow at an unprecedented rate, the global semiconductor industry is bound to jump high in 2025. A view of this year's new semiconductor’s prospects analyzes the necessary market forces, sophisticated innovations, and emerging trends which will give the semiconductor industry a fresh outlook. Advances in chip designs towards increasing the role of ICs in industries help semiconductors form the core of the interdependent economy. MarketsandMarkets estimates the global semiconductor market to be worth USD 628 billion in 2024, and is expected to reach USD 707 billion by 2025, at agrowth rate of 12.5%. This growth is attributed to the increasing demand for semiconductors in data center, HPC, and Al applications. This is expected to strengthen semiconductors in their fundamental positioning as a platform for new generations of digital infrastructure. Growing demands from hyperscalers and cloud service providers will fuel growth for semiconductors as Al workloads, specifically for data center and hyperscalers, increases manifold.

Global Semiconductor Industry Outlook 2025

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Key Growth Drivers:

High Bandwidth Memory: High-bandwidth memory is addressing the growth and aiding the   high-computing demands in workloads and requirements in data centers. HBM is emerging as a critical enabler of semiconductor innovation in this generation as it offers ultrahigh speed with high energy efficiency. These high bandwidth memories are  integral for Al accelerators, GPUs, and advanced processors that are set to meet computing demands rising between hyperscalers and cloud providers. The growing deployment of Al-driven applications is going to speed up the demand for advanced HBM solutions in 2025. With the relentless drive by semiconductor manufacturers to improve memory performance, HBM is poised to lead the way in the future of high-speed and power-efficient computing.

AI Server: With the advent of Al-driven computing, the semiconductor industry is in a transformation stage. Al servers are now seen as one of the growth drivers of semiconductor industry in 2025. High-performance processors, GPUs, FPGAs, and Al accelerators are on the rise, as enterprises, cloud providers, and hyperscalers scale up their Al infrastructure. Deep learning, natural language processing, and real-time analytics are some applications that require advanced chips. In addition, the growth of edge Al, autonomous systems, and large-scale model training is accelerating the need for specialized semiconductor solutions, reinforcing Al servers as a critical pillar of next-generation computing.

Gen-AI Smartphones: In the smartphone sector Gen-Al technologies will come to dominate and create growth opportunity in the semiconductor sector in 2025. Gen-Al smart phones are integrated with highly efficient processors, Al chips, and integrated circuits. These advanced functions support real-time machine learning as well as powerful computation. Functions driven by artificial intelligence enable advanced smartphones with new limits to push mobile technology ahead. With a constant growth in the demand for smarter devices, it is imperative to provide them with advanced semiconductors for the efficient functioning of such innovation.

Challenges:

upply Chain Distrptions: Supply chains are one of the most critical part of the semiconductor industry in 2025 since it depends on international supply chain to get its necessary inputs such as silicon, rare earth metals, and manufactured, difficult-to-source material. Any type of disturbance-even natural disasters or logistical blockages-can mean production delays, increased costs, and inability to meet increasing demand. With the rapid growth of Al, tensions on the semiconductor supply chain are growing as the acute need for stronger resilience and diversification for sustained growth to meet the demands of markets grows.

Regulatory & Trade Policies: The increasing complexity of international regulations and compliance is one of the main challenges to the semiconductor industry in 2025, with companies navigating through increased export controls, local manufacturing mandates, and constantly evolving intellectual property protections. In many cases, such restrictions severely limit the smooth flow of goods and technologies for companies.. Regulation and trade policies not only jeopardize global supply chains but also increase operating costs and limit access to important markets and sophisticated technologies.  As semiconductor companies navigate increasing regulatory pressures, they must remain agile and adaptable to sustain growth and stay competitive. These evolving regulations add significant complexity to their global operations and strategic planning, requiring continuous adjustments to maintain compliance and market position.

The report provides comprehensive insights into the growth trajectory of the semiconductor industry, including key trends and drivers.

2024

• PROLIFERATION OF GENERATIVE-AI FUELING DEMAND FOR AI CHIPS: The proliferation of Generative Al has been primarily responsible for boosting the demand for AI chips. Al-based technologies generally demand high performance processing capabilities and, hence, call for processors, especially in their implementation of the complicated tasks related to deep learning and natural language processing. Al chips have enabled  accelerated processing requirements involving Gen Al applications related to content generation, data processing, and making real-time decisions.

• AI SERVER SECURES DOUBLE-DIGIT PENETRATION IN GLOBAL SERVER MARKET FOR THE FIRST TIME: For the first time, AI servers have made a double-digit penetration in the global server market, a development that is bringing an important milestone to the AI server market.. Driving the change from servers to AI servers will be the front-line cloud vendors: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, using AI-optimized servers to address the requirements for generative Al, machine learning, and autonomous computing workloads. With Al-powered applications increasingly being adopted by enterprises, there is a predicted pick-up in the high-performance Al servers to change the server landscape globally in 2025.

• HBM TAKING CENTER STAGE: MANUFACTURERS ACTIVELY EXPANDING HBM PRODUCTION TO MEET GROWING DEMAND: Companies in the silicon semiconductor industry, such as Sk Hynix, Samsung, and Micron, provide HBM  with investment into next-generation memory technologies to support future generation accelerators in Al processing for GPU, along with cloud computing infrastructure. With the growing complexity in Al workloads, the high-speed and energy-efficient architecture of HBM is increasingly a critical enabler of future computing.

2025

• IN 2025, 30% OF OVERALL PC SHIPMENT LIKELY TO BE AI PCs: On-device Al capabilities and improved performance are expected to increase demand by 30% of total PC shipments in 2025. Intel, AMD, and Qualcomm, among others, are embedding dedicated Al accelerators in next-generation processors to support real-time Al workloads, power efficiency, and seamless user experiences. AI PCs will change the world of personal computing as businesses and users get on board to harness the productive and secure power offered by AI.

• HIGH-BANDWIDTH MEMORY NEARLY SOLD-OUT TILL 2025; GROWING DEMAND FROM AI INFRASTRUCTURE WILL DRIVE EXPONENTIAL GROWTH FOR HBM: HBM is almost sold out through 2025 due to surging demand from AI infrastructure, HPC, and data centers. Top memory makers, such as SK hynix, Samsung, and Micron, are ramping up to meet the orders from NVIDIA, AMD, and Intel. More complex Al-based workloads will make speeding up large-scale HBM production all the more critical.

• GEN-AI SMARTPHONE SHIPMENT LIKELY TO BE 32% OF OVERALL SMARTPHONE SHIPMENT IN 2025: In 2025, shipments of Gen-Al smartphones are projected to hit 32% of overall smartphone shipment with on-device Al integrations for better user experience.  Qualcomm and MediaTek have introduced AI-driven processors, while Apple's Neural Engine is integrated into leading brands like Apple, Samsung, and Google to support real-time AI applications such as personalized assistance, advanced imaging, and seamless automation. AI-powered smartphones are set to reshape the mobile industry, as AI-driven features become a key differentiator in the competitive landscape.

MarketsandMarkets’ Global Semiconductor Industry Outlook 2025 report equips business leaders and semiconductor professionals with the insights needed to navigate the year ahead. Leveraging years of expertise in the dynamic semiconductor sector, the report integrates perspectives from industry experts, detailed evaluations by analysts, and extensive interviews with global stakeholders. Uncover the latest trends and key developments shaping the semiconductor industry through our comprehensive, data-driven analysis.