The global semiconductor industry is heading into a strong recovery phase, with revenue anticipated to reach $630 billion in 2024, a 19% rise over the previous year, as noted by the latest Gartner report. This growth trend follows a challenging 2023 and appears to be set for continued momentum, with projections estimating an additional increase to $717 billion by 2025.

The boost comes as AI technologies, data-processing advancements, and a return in electronics manufacturing drive market demand. AI-related chips, in particular, have become essential as applications expand across sectors—from high-performance computing to everyday consumer electronics.

As a result, memory components such as NAND flash and DRAM are experiencing increased demand, addressing more specialised computing needs and supporting AI-intensive workloads. Gartner highlights that NAND flash, essential in AI systems, is set to see significant gains, with a 12% revenue increase by 2025, driven partly by persistent undersupply and soaring demand in AI applications.

The demand surge is similarly benefiting GPUs, which are vital to AI development, particularly in model training and deployment. After experiencing a dip in 2023, the GPU market is expected to rebound strongly, potentially growing by 27% in 2025 and reaching $51 billion. The specialised memory segment, especially high-bandwidth memory (HBM), has also seen increased investment to support the high-capacity needs of modern AI hardware, with manufacturers scaling production and enhancing memory packaging.

DRAM is also seeing a resurgence, driven by the production of high-bandwidth memory and rising adoption of DDR5 technology, which offers faster and more efficient data processing. Analysts note that these advances are contributing to a recovery for DRAM, with revenues projected to rise from $90.1 billion in 2024 to $115.6 billion by 2025, as supply issues ease and technology progresses.

This robust growth in semiconductors reflects the sector’s adaptation to AI and data-processing needs, as memory technologies evolve to match these rising demands. While the market for automotive and industrial applications has seen slower growth, the trajectory in consumer electronics and AI-powered solutions keeps the semiconductor industry on track for a dynamic, technology-driven period of expansion. With AI, memory technologies, and GPU enhancements leading the way, the semiconductor market appears well-positioned for sustained growth.

(With ANI inputs)