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AI And Infrastructure Fuel the Chip Boom The Global Semiconductor Industry Is Expected to Reach $800 Billion in 2025

From Sebastian Gerstl | Translated by AI 1 min Reading Time

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AI, data centers, and network technologies are accelerating growth—even revitalizing long-established market segments.

According to market analysts at IDC, the semiconductor market is set to reach a record $800 billion this year. If the trend driven by data centers and AI continues, the trillion-dollar mark could be surpassed as early as 2028.(Source: Freely licensed / Pixabay)
According to market analysts at IDC, the semiconductor market is set to reach a record $800 billion this year. If the trend driven by data centers and AI continues, the trillion-dollar mark could be surpassed as early as 2028.
(Source: Freely licensed / Pixabay)

The semiconductor industry is headed for another record year: According to IDC, the global market will grow by 17.6% in 2025, reaching $800 billion. This growth is primarily driven by the massive expansion of AI infrastructures, cloud services, and network architectures.

For the first time, a single semiconductor company is expected to generate over $200 billion in annual revenue—a milestone that highlights the growing dominance of AI-driven applications. According to IDC, the compute segment alone will increase by 36% to $349 billion, with an expected CAGR of 12% through 2030.

Demand for networking semiconductors is growing particularly strongly: Hyperscalers, telecom providers, and data centers are increasingly investing in Ethernet switches, SmartNICs, and DPUs to make data movement more efficient. Bottlenecks are no longer primarily in processing, but in data transport. Optical interconnects are also gaining importance. Legacy networking technologies are being phased out to support AI workloads with high bandwidth and low latency—a trend that is fundamentally transforming network infrastructures.

After two weak years, the automotive sector is showing signs of stabilization. Inventory levels are normalizing, especially in China, leading to sequential growth. However, uncertainties remain: expiring subsidies, pricing pressures, and trade tensions are dampening optimism.

Despite this, the automotive segment is expected to grow by 3% in 2025, supported by the rising semiconductor content per vehicle, SiC-/GaN-based drive technologies, and software-defined architectures. The industrial segment is also rebounding—driven by applications in defense, manufacturing, edge AI, and electrification.

In the wireless segment, AI features, NPUs, and 5G integration are increasing chip demand per device, even though unit volumes are stagnating. This segment is projected to grow by 5% in 2025, primarily due to functional density and rising average selling prices (ASPs).

According to IDC, the global semiconductor market could surpass the $1 trillion mark as early as 2028—two years earlier than previously expected.(sg)

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