Global Semiconductor Market Set for Strong Growth, Driven by AI Demand

AI to drive global fab market grow strongly this year: Report

The global semiconductor market is projected to grow significantly, reaching USD 630 billion in 2024, a 19 per cent increase from 2023. Growth is driven by demand for AI-related semiconductors and recovery in electronics production. Memory and GPU markets will also contribute. Both sectors are expected to see double-digit growth in the next two years.The global semiconductor market is on track to experience substantial growth in the coming years, with total revenue expected to reach USD 630 billion in 2024--a 19 per cent increase from the previous year. According to a recent report by Gartner, Inc., this upward trajectory is projected to continue, with revenue anticipated to climb to USD 717 billion in 2025, marking an additional 14 per cent growth. The report also highlighted that this growth follows a challenging period in 2023, when the semiconductor market faced a decline. However, double-digit growth rates in both 2024 and 2025 signal a robust rebound, primarily driven by a surge in demand for AI-related semiconductors and a recovery in electronics production. "The growth is driven by a continued surge in AI-related semiconductor demand and recovery in electronic production, while demand from the automotive and industrial sectors continues to be weak," said Rajeev Rajput, Senior Principal Analyst at Gartner. The report also noted that the memory market and graphics processing units (GPUs) are expected to play a significant role in driving semiconductor revenue in the near term. Specifically, memory market revenue is forecasted to grow by 20.5 per cent in 2025, reaching USD 196.3 billion. This growth will be influenced by a sustained undersupply of memory components in 2024, which is expected to drive NAND flash memory prices up by 60 per cent this year. While prices are anticipated to soften by about 3 per cent in 2025, NAND flash revenue is forecasted to reach USD 75.5 billion, representing a 12 per cent increase from 2024. DRAM, another crucial memory segment, is also predicted to experience a recovery, with revenues expected to reach USD 115.6 billion in 2025, up from USD 90.1 billion in 2024, as per the report. This growth is supported by an easing undersupply, increased production of high-bandwidth memory (HBM), and rising demand for double data rate 5 (DDR5) technology. The GPU market, which has become essential for the training and development of AI models, is also projected to see significant growth. After a dip in 2023, GPU revenue is set to rebound, with an expected 27 per cent increase in 2025, bringing it to USD 51 billion. The report noted that demand for HBM, a specialized memory solution for high-performance AI servers, is also seeing a steep rise. "Vendors are investing significantly in HBM production and packaging to match next-generation GPU/AI accelerator memory requirements," said George Brocklehurst, VP Analyst at Gartner. Overall, the semiconductor industry is poised for a promising future, with AI and memory technology serving as major catalysts for growth in the coming years.

Gartner Forecasts Worldwide Semiconductor Revenue to Grow 14% in 2025

Semiconductor Revenue to Total $717 Billion in 2025Semiconductor Revenue to Grow 19% in 2024GPU Revenue to Grow 27% in 2025 Global semiconductor revenue is projected to grow 14% in 2025 to total $717 billion, according to the latest forecast from Gartner, Inc. In 2024, the market is forecast to grow 19% and reach $630 billion. Following a decline in 2023, semiconductor revenue is rebounding and expected to record double-digit growth in 2024 and 2025 (see Table 1). "The growth is driven by a continued surge in AI-related semiconductor demand and recovery in electronic production, while demand from the automotive and industrial sectors continues to be weak," said Rajeev Rajput, Senior Principal Analyst at Gartner. Table 1: Semiconductors Revenue Forecast, Worldwide, 2023-2025 (Billions of U.S. Dollars) 202320242025Revenue530.0629.8716.7Growth (%)-11.718.813.8 Source: Gartner (October 2024) In the near term, the memory market and graphics processing units (GPUs) will bolster semiconductor revenue globally. The worldwide memory revenue market is forecast to record 20.5% growth in 2025, to total $196.3 billion. Sustained undersupply in 2024 will fuel NAND prices up 60% in 2024, but they are poised to decline by 3% in 2025. With lower supply and a softer pricing landscape in 2025, NAND flash revenue is forecast to total $75.5 billion in 2025, up 12% from 2024. DRAM supply and demand will rebound due to improved undersupply, unprecedented high-bandwidth memory (HBM) production and rising demand, and the increase in double data rate 5 (DDR5) prices. Overall, DRAM revenue is expected to total $115.6 billion in 2025, up from $90.1 billion in 2024. AI Impact on Semiconductors Since 2023, GPUs have dominated the training and development of AI models. Their revenue is projected to total $51 billion, an increase of 27% in 2025. "However, the market is now shifting to a return on investment (ROI) phase where inference revenues need to grow to multiples of training investments," said George Brocklehurst, VP Analyst at Gartner. Among them is a steep increase in HBM demand, a high-performance AI server memory solution. "Vendors are investing significantly in HBM production and packaging to match next-generation GPU/AI accelerator memory requirements," said Brocklehurst. HBM revenue is expected to increase by more than 284% in 2024 and 70% in 2025, reaching $12.3 billion and $21 billion, respectively. Gartner analysts predict that by 2026, more than 40% of HBM chips will facilitate AI inference workloads, compared to less than 30% today. This is mainly due to increased inference deployments and limited repurpose for training GPUs. Gartner clients can read more in "Forecast: Semiconductors and Electronics, Worldwide, 2022-2028, 3Q24 Update." About Gartner for High Tech Gartner for High Tech equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech. Follow news and updates from Gartner for High Tech on X and LinkedIn using #GartnerHT. About Gartner Gartner, Inc. (NYSE: IT) delivers actionable, objective insight that drives smarter decisions and stronger performance on an organization's mission-critical priorities. To learn more, visit gartner.com.