Global semiconductor revenue set to soar by 14% to $717 billion by 2025

Global semiconductor revenue is projected to grow by 14 percent, reaching $717 billion in 2025, up from $630 billion this year, according to a report released on Monday. In the near term, the memory market and graphics processing units (GPUs) will drive semiconductor revenue growth globally, as highlighted in a Gartner report.

The worldwide memory revenue market is forecasted to grow by 20.5 percent in 2025, reaching $196.3 billion. A sustained undersupply in 2024 will drive NAND prices up by 60 percent, but they are expected to decline by 3 percent in 2025. With lower supply and softer pricing in 2025, NAND flash revenue is projected to total $75.5 billion, up 12 percent from 2024.

Following a decline in 2023, semiconductor revenue is rebounding and is expected to record double-digit growth in 2024 and 2025. “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.

DRAM supply and demand are also expected to rebound due to improved undersupply, unprecedented high-bandwidth memory (HBM) production, rising demand, and an increase in double data rate 5 (DDR5) prices. Overall, DRAM revenue is projected to total $115.6 billion in 2025, up from $90.1 billion in 2024, according to the report.

GPUs have dominated the training and development of AI models, with revenue projected to total $51 billion, an increase of 27 percent 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. HBM revenue is expected to increase by more than 284 percent in 2024 and 70 percent in 2025, reaching $12.3 billion and $21 billion, respectively.

This projected growth reflects the ongoing transformation in the semiconductor industry, driven by advancements in AI, memory markets, and GPU technology. As the market shifts towards maximizing ROI, the focus will be on leveraging these technological advancements to drive further growth and innovation.