Global semiconductor market to grow strongly this year driven by AI demand and memory market recovery: Report

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. (ANI)