Global semiconductor revenue is poised to reach $800 billion by 2025, driven by escalating demand for AI infrastructure within data centers, as well as growth in networking technologies and a gradual recovery in automotive and industrial sectors.
According to the International Data Corporation (IDC), this figure marks a notable 17.6% increase from the projected $680 billion for 2024, a year already characterized by robust growth—22.4%—after a previous decline. The primary catalyst for this expansion is the surging need for data centers fueled by AI requirements.
The computing segment of the semiconductor market is forecasted to expand 36% year-on-year, reaching $349 billion in 2025. This growth is attributed to the high demand for AI workloads, with IDC predicting a sustained compound annual growth rate of 12% through 2030. The momentum in this area is expected to lead to unprecedented developments, including a semiconductor vendor exceeding $200 billion in annual revenue for the first time, highlighting the prominence of AI-driven expenditures in data centers.
Networking facilities are becoming critical in managing AI workloads, as the movement of data is increasingly limiting system performance, even more than compute power itself. In response, both cloud service providers and telecommunications companies are increasing their investments in networking chips and optical interconnects. IDC projects a 13% increase in demand for networking and connectivity semiconductors by 2025, spearheaded by advancements such as high-capacity Ethernet switches, SmartNICs, and DPUs.
Additionally, other markets are starting to recover from previous downturns. The automotive and industrial semiconductor sectors, which faced setbacks due to oversupply and weak demand in 2024, are beginning to stabilize. Despite challenges due to expiring subsidies in China and ongoing trade uncertainties, the automotive semiconductor sector is expected to grow by 3% in 2025, driven by greater chip integration into vehicles and the advent of electrification and advanced materials.
The industrial semiconductor market is also forecasting an 11% growth recovery in 2025 after a significant contraction the previous year. This growth correlates with increasing demand from military, aerospace, manufacturing, and edge AI applications, although macroeconomic uncertainties may continue to be a hurdle.
Smartphone semiconductor revenues are anticipating a modest growth of 5% in 2025, buoyed by the adoption of 5G technology and advanced multimedia capabilities.
Industry analysts predict a robust long-term trajectory for these markets, supported by increased chip adoption and electrification trends. IDC foresees that by 2028, the semiconductor market will surpass $1 trillion in revenue, solidifying its role as a rapidly expanding and strategically vital component of the global economy.
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