Source: Content compiled from semiconductor-digest

TECHCET has raised its latest forecast for total semiconductor revenues through 2024, now projecting growth of nearly 13% over 2023 to over $617 billion. While 2024 revenues are an improvement over 2023, they still fall short of market expectations. Fortunately, 2025 is expected to be a strong year with 27% growth. This growth will be driven by continued strong growth in leading-edge products related to high-performance computing and data centers, as well as rising demand in all other applications.

Material suppliers are currently reporting improving sales in both the leading-edge logic and advanced memory segments. However, other areas of the industry remain mixed, with steps being taken to mitigate the impact of potential demand weakness and reduce excess inventory resulting from a weaker-than-expected overall industry performance. Silicon wafers have been particularly hard hit, with extremely weak sales of small-diameter wafers. Nonetheless, revenues for large-diameter (300mm) wafers have improved, primarily due to a more favorable product mix.

Gartner Procast

Global semiconductor revenue is expected to grow 14% in 2025

Global semiconductor revenue is expected to grow 14% to $717 billion (£552 billion) in 2025, according to the latest forecast from technology research and advisory company Gartner.

Following a decline in 2023, semiconductor revenue is rebounding, with double-digit growth expected in both 2024 and 2025. The market is expected to grow 19% to $630 billion (£485 billion) by the end of the year.

"This growth is driven by continued growth in AI-related semiconductor demand and a recovery in electronics production, while demand in the automotive and industrial sectors remains weak," explained Rajeev Rajput, senior principal analyst at Gartner.

In the short term, the research firm expects the memory market and graphics processing units (GPUs) to strengthen global semiconductor revenue.

Global memory market revenue is expected to grow 20.5% in 2025 to $196.3 billion (£151 billion). Interestingly, ongoing supply shortages in 2024 will drive NAND memory prices up 60% in 2024, but prices will fall 3% in 2025. Due to reduced supply and a weak pricing environment in 2025, NAND flash memory revenues are expected to total $75.5 billion (£58 billion) in 2025, up 12% from 2024.

Dynamic random access memory (DRAM) supply and demand will also rebound due to improved supply shortages, unprecedented high-bandwidth memory (HBM) production, growing demand, and rising double data rate 5 (DDR5) prices. Overall, DRAM revenues are expected to grow from $90.1 billion (£69 billion) in 2024 to $115.6 billion (£88 billion) in 2025.

Training and development of models. Revenues are forecast to reach $51 billion (£39 billion) by 2025, up 27%.

"However, the market is now moving to a return on investment (ROI) phase, where inference revenues need to grow to a multiple of training investment," noted George Brocklehurt, vice president analyst at the research firm.

This includes a sharp increase in demand for HBM, a high-performance AI server memory solution. "Vendors are investing heavily in HBM production and packaging to meet next-generation GPU/AI accelerator memory requirements," Brocklehurst said.

HBM revenues are forecast to grow by more than 284% in 2024 and 70% in 2025, to $12.3 billion (£9.4 billion) and $21 billion (£16 billion), respectively. Gartner analysts predict that by 2026, more than 40% of HBM chips will be used for AI inference workloads, up from less than 30% today. This is mainly due to the increase in inference deployments and limited reuse of training GPUs.

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