Global semiconductor market exceeds $830bn amid AI surge

The global semiconductor market surpassed $830 billion in 2025, according to market intelligence firm Omdia, marking the second consecutive year of more than 20 per cent annual revenue growth.

This milestone represents the first time since 2001 that the industry has recorded two consecutive years with over 20 per cent growth, highlighting the scale of recent expansion.

The report attributes this performance largely to strong demand for artificial intelligence-related technologies, which continues to drive market momentum.

Unlike in 2024, when automotive, consumer and industrial segments declined, all major semiconductor application segments recorded revenue growth in 2025.

“While AI-driven demand initially strengthened pricing for high-bandwidth memory in 2024, the impact has increasingly extended across the broader DRAM market,” said Senior Principal Analyst Lino Jeng.

“AI servers require not only more HBM but also significantly more system memory, particularly DDR5,” he added.

“At the same time, suppliers have shifted wafer allocation toward HBM and high-density server DRAM,” he continued.

“As a result, pricing improvements have spread across multiple DRAM segments in 2025 as the market recovers from the downturn in 2023,” he explained.

“DRAM revenue has nearly tripled from just over $50bn at the market low in 2023 to above $150bn in 2025, making it the fastest-growing semiconductor component with year-on-year growth exceeding 50 per cent,” he concluded.

The data shows that DRAM has emerged as the fastest-growing semiconductor component, driven by AI server demand and memory requirements.

At the same time, the surge in revenues since 2023 has led to increased market concentration among leading companies.

While total semiconductor revenue grew by approximately 53 per cent between 2023 and 2025, revenue among the top ten semiconductor companies increased by 90 per cent, compared with just 8 per cent growth across the rest of the market.

This growth has been concentrated among memory suppliers and NVIDIA, underlining how significantly AI demand is reshaping the competitive landscape.

Combined, these four companies increased their share of total semiconductor revenue from 24 per cent in 2023 to 42 per cent in 2025.

Beyond memory and AI-driven segments, the data processing segment recorded the highest annual growth, rising by over 40 per cent year-on-year.

All other semiconductor application segments also expanded in 2025, signalling a broad-based market recovery.

The industrial semiconductor market returned to growth in 2025 after two consecutive years of decline.

This follows inventory corrections in 2023 and 2024, which had led to a sharp drop in industrial semiconductor revenues after strong post-pandemic demand.

In 2025, however, the segment rebounded, recording growth of over 6 per cent year-on-year.

The report also noted that after a market decline in 2023, the industry experienced renewed growth in 2024 driven by AI demand, although this expansion was uneven across segments.

In 2025, AI demand remained strong while growth broadened across the entire market, reinforcing the sector’s recovery.

Looking ahead, Omdia indicated that if AI demand continues through 2026 and the market records another year of over 20 per cent growth, total semiconductor revenue could surpass $1 trillion for the first time.