According to the latest forecast from Gartner, global semiconductor revenue is expected to rise significantly, with a projected growth of 14% in 2025, reaching $717 billion. This follows a rebound from a decline in 2023, with the market anticipated to grow by 19% in 2024, totaling approximately $630 billion.

The surge in revenue is primarily fueled by increasing demand for AI-related semiconductors and a recovery in electronic production, despite continued weakness in the automotive and industrial sectors. Rajeev Rajput, a senior analyst at Gartner, highlighted that the memory market and graphics processing units (GPUs) will play crucial roles in driving this growth.

Specifically, the memory market is forecasted to grow by 20.5% in 2025, reaching $196.3 billion. NAND flash memory prices are expected to rise by 60% in 2024 due to ongoing undersupply but are predicted to decline by 3% in 2025, leading to an overall revenue increase of 12% to $75.5 billion. Meanwhile, DRAM revenue is projected to rebound from $90.1 billion in 2024 to $115.6 billion in 2025, driven by improved supply and rising demand for high-bandwidth memory (HBM) solutions.

GPUs, which have been central to training AI models since 2023, are set to generate $51 billion in revenue by 2025, marking a 27% increase. However, George Brocklehurst, a VP analyst at Gartner, noted a shift in the market towards achieving return on investment (ROI), necessitating a significant increase in inference revenues.

Demand for HBM is also expected to surge, with revenue projected to grow by 284% in 2024 and 70% in 2025, reaching $12.3 billion and $21 billion, respectively. By 2026, more than 40% of HBM chips are expected to support AI inference workloads, up from less than 30% today, reflecting the growing importance of these chips in next-generation AI applications.

As the semiconductor market evolves, companies are investing heavily in production capabilities to meet the rising demands of the AI sector, positioning themselves for future growth.