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18 February 2026
Semiconductors are materials with electrical conductivity between conductors and insulators, typically made from silicon, germanium, or silicon carbide. They form the backbone of modern electronics, powering memory, logic chips, microcontrollers, sensors, and power devices used in consumer electronics, automotive, industrial, and data infrastructure systems.
The global semiconductor market is projected to grow from USD 1,033.1 billion in 2026 to USD 3,128.7 billion by 2035, registering a compound annual growth rate (CAGR) of 14.9% during the forecast period (2026–2035).1
Asia-Pacific dominated the market in 2025 with a 51% share, reflecting its central role in fabrication, assembly, and advanced packaging. Meanwhile, the U.S. semiconductor market is expected to reach USD 258.30 billion by 2032, driven by demand from consumer electronics, integrated circuits, data centers, and defense-related applications.2
The semiconductor industry is undergoing one of the most profound transformations in its history, driven by artificial intelligence, cloud computing, electrification, data-center expansion, 5G and Automotives. Semiconductors are no longer just industrial inputs—they are now critical to economic competitiveness, national security, and technological sovereignty.
According to the Semiconductor Industry Association (SIA) and World Semiconductor Trade Statistics (WSTS), worldwide semiconductor sales increased from USD 204.4 billion in 2000 to USD 440.4 billion in 2020, a CAGR of 3.91%.3 The industry has now entered a new structural growth phase. Global semiconductor sales reached USD 791.7 billion in 2025, representing 25.6% year-on-year growth compared to 2024’s USD 630.5 billion. Fourth-quarter sales alone rose 37.1% year-on-year to USD 236.6 billion, signalling sustained demand rather than short-term inventory normalization.
• Logic and Advanced Computing
Logic devices emerged as the fastest-growing segment, generating USD 301.9 billion in 2025, up 39.9% year-on-year, driven by CPUs, GPUs, and AI accelerators used in generative AI, cloud infrastructure, and autonomous systems.
• Memory
Memory chips formed the second-largest segment, with revenues rising 34.8% to USD 223.1 billion, supported by strong demand for DRAM and high-bandwidth memory (HBM) amid AI-driven capacity constraints.4
• Broad-Based Demand
In 2026, generative AI chips are projected to generate nearly 50% of semiconductor industry revenues, despite accounting for fewer than 20 million units (0.2% of total volume).5 Growth is also broad-based, extending beyond leading-edge chips to analog, power, networking, and storage semiconductors.
Asia-Pacific
Semiconductor sales in Asia-Pacific increased 45% year-on-year in 2025, reaching USD 304.87 billion.
Growth was driven by:4
• Taiwan’s leadership in advanced logic manufacturing
• South Korea’s dominance in memory production
• Singapore’s strength in advanced packaging
• The region continues to lead global semiconductor manufacturing, with China, Taiwan, South Korea, and emerging hubs such as India and Malaysia playing key roles.
Americas
• Sales in the Americas rose 30.5%, supported by strong demand from artificial intelligence (AI), cloud computing, and defense investments.4
• North America remains highly innovation-driven, with U.S. semiconductor firms investing approximately 20% of revenue in research and development (R&D).2
Europe
• Europe recorded 6.3% growth, reflecting its specialization in automotive, industrial, telecom, and power electronics rather than leading-edge logic manufacturing. Key markets include Germany and France, supported by strong industrial demand.
China occupies a uniquely strategic position in the global semiconductor ecosystem, serving as both one of the largest consumers and a rapidly expanding domestic manufacturer.
In 2025, semiconductor sales in China grew 17.3% year-on-year, driven by demand from:
1. Consumer electronics
2. Electric vehicles (EVs)
3. Industrial automation
4. AI-related applications
Despite restrictions on advanced chips and equipment, China has accelerated domestic production at mature and specialty nodes.4
• SMIC, China’s largest foundry, added 50,000, 12-inch equivalent wafers per month in 2025, with plans to add an additional 40,000 wafers per month by end-2026.
• Capacity utilization reached approximately 96%, with 87.6% of revenue generated domestically.6
• Rapid localization is underway in analog chips, display drivers, microcontrollers (MCUs), image sensors, and memory products.
China’s strategy reflects a broader push toward semiconductor self-reliance, particularly in mature-node production and critical supply-chain segments.
China’s semiconductor expansion is underpinned by strong state backing:
• A requirement that at least 50% of equipment in new fabs be domestically sourced.
• Launch of the third phase of the National Integrated Circuit Industry Investment Fund (“Big Fund”) in 2024, totalling ¥344 billion (≈USD 49 billion).
• 421 orders for domestic semiconductor equipment placed by state-affiliated entities in 2025.
Domestic equipment suppliers such as Naura Technology and AMEC are now testing tools on 7nm production lines, with estimates suggesting ~50% self-sufficiency in certain equipment sub-segments.7
The semiconductor industry is transitioning from cyclical growth to a structural expansion phase, underpinned by AI, electrification, digital infrastructure, and strategic competition. China’s dual role as a dominant consumer and increasingly capable producer will remain a defining force shaping global semiconductor supply chains, investment patterns, and geopolitics over the next decade.Top of Form
Our Indices:
1. Indxx ITICS Semiconductor FactorEdge Index
2.Indxx US AI Customized Semiconductor ASIC Index
3. Indxx High Liquidity Market Dynamics Semiconductor Industry Index
1. Business research insights 2. Fortune Business insights 3. Semiconductors 4. Tom'sHardware 5. Deloitte 6. Reuters 7. Reuters