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The AI boom is causing analysts in the semiconductor industry to go into overdrive with euphoria. Market turnover could reach one trillion US dollars by the end of 2026. However, some industry experts see warning signs that this development is unrealistic.

It has been predicted for years that the semiconductor market will be worth one trillion US dollars by 2030 at the latest. For some months now, however, analysts have literally been going into overdrive, as the AI boom is pushing the date for reaching this psychologically important mark ever further into the future. It is now expected that the market will have reached this turnover by the end of 2026.

But there is a but. Some analysts warn that achieving this goal is unlikely under current conditions, at least not by the end of this year. Industry expert Malcolm Penn from Future Horizons is at least of this opinion; in his view, structural weaknesses and insufficient capacities are preventing this success (via eenewseurope), even though demand for AI-related chips and storage solutions is going through the roof. The computing and data storage segments in particular are expected to see double-digit growth.

Growth Not Very Diversified

Despite this robust overall development, market observers warn of asymmetrical dynamics: a large part of the growth is concentrated in a few application areas such as AI infrastructure and hyperscale data centers, while traditional end markets such as automotive or smartphones are under pressure. This structure can exacerbate cyclical weaknesses and production backlogs if the strong demand in some areas subsides.

Penn predicts growth of around 12% for the semiconductor market in 2026, around 10% less than the 22% in 2025. In his opinion, growth could be as high as 18%. This figure differs significantly from other, more optimistic forecasts by market observers, who expect growth of up to 40 percent. "Any party is a good party, and ideally you enjoy it while it lasts, but be prepared for the hangover," says Penn, referring to overcapacity at older process nodes in China and the weak global economy.

AI has great potential, says Penn, but artificial intelligence is not yet sustainable and will not become so this year. "The first AI killer app won't be available until 2030, but the investment is in the trillions of dollars, while the return is only in the millions," he says. At the same time, Penn warns of the value of AI chips, as they lose their usefulness within a very short space of time.

As we have already reported, the hardware in an AI data center ages so quickly that it can only be used for a few years. Accordingly, Penn is also critical of any measures, such as those taken by TSMC, to further expand the high-volume production of AI chips. "If the AI bubble bursts, the overcapacity will really hurt," he warns. TSMC has already promised further investment in the company's Arizona cluster, where AI chips are primarily to be manufactured, in recent years and this year.

The Other Side of the Coin

Among the analysts who attribute high growth to the market are those from Omdia. According to a market analysis dated January 15, 2026: "Growth will be driven by the rapid increase in sales of memory and logic ICs due to massive demand from the AI market. Semiconductor revenue forecast for 2025 increased significantly by 20.3% year-on-year, driven by better-than-expected Q3 2025 results and robust growth expected in Q4 2025. Sales growth in DRAM and NAND memory ICs will remain unprecedented thanks to the strong expansion in logic ICs, resulting in a market forecast for 2026 of 30.7% year-on-year."

In addition to the potential braking factors mentioned above, more realistic analysts see geopolitical uncertainties and the redistribution of storage production capacities in favor of high-margin AI applications further weighing on the market balance. All of these are potential risks to the stability of the sector, even if aggregate revenues continue to rise. Overall, the AI boom remains a key growth driver for semiconductors, but the quality of growth and diversification across different market segments will be important areas of observation for the industry and investors in 2026 and beyond. (sb)

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