AI Infrastructure Boosts Global Semiconductor Revenue Growth to 17.6% in 2025

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According to the Worldwide Semiconduct o r Technology and Supply Chain Intelligence service from International Data Corporation (IDC), worldwide semiconductor revenue is expected to reach $800 billion in 2025, growing 17.6% year-over-year from $680 billion in 2024. This follows a strong rebound in 2024, when revenue grew by 22.4% year-over-year.

Datacenter momentum continues to lead growth

Datacenter semiconductors remain the primary growth driver for 2025. Demand for AI infrastructure and accelerated computing as well as datacenter networking is fueling significant semiconductor revenue expansion. Other sector, including clients experienced a pull-in of demand ahead of tariff uncertainty, resulting in a stronger first half of 2025. Adjacent markets supporting datacenter adoption including rack-scale systems, high-speed interconnects, memory, and advanced networking semiconductors are also benefiting from the datacenter momentum. For the first time, a single semiconductor company is projected to surpass $200 billion in annual revenue, reflecting the scale of AI focused datacenter driven growth. IDC forecasts that the compute segment of the semiconductor market will grow 36% to $349 billion for 2025 with a 12% five-year CAGR through 2030.

Networking and connectivity surge helps to alleviate performance bottleneck and data movement

Semiconductor demand for datacenter networking and wired/wireless infrastructure is also projected to grow 13% in 2025, as cloud providers, telcos, and enterprises upgrade networks to support AI workloads and low-latency services. The rapid adoption of AI workloads has created a performance bottleneck in data movement rather than compute, driving hyperscalers and enterprises to accelerate investments in networking semiconductors. Growth will be led by networking chips and optical interconnects. Networking chips such as high capacity ethernet switches, SmartNICs, and DPUs that offload networking tasks from CPUs and GPUs enable greater efficiency in AI training and inference.

Automotive and industrial markets return to growth after almost two years of correction

After experiencing softness in 2024 due to excess inventory buildup, the automotive and industrial semiconductor markets are projected to gradually recover in 2025. In the automotive semiconductor market, several leading suppliers reported sequential growth amid normalization of customer inventories, especially in China. However, companies remain cautious heading into the second half of 2025 due to expiration of subsidies in China, pricing pressure across supply chain, continued customer destocking, and trade-related uncertainty. The automotive semiconductor market remains supported by rising content per vehicle, adoption of SiC and GaN for electrification and power and the shift towards domain and zonal controllers, and the software-defined vehicles. IDC forecasts the automotive semiconductor market will grow 3% in 2025.

The industrial semiconductor market recovered in the first half of 2025 with broad-based signs of recovery with the key industrial semiconductor suppliers reporting sequential growth, backlog visibility, and return to growth. Drivers of industrial semiconductor market growth includes military and aerospace, manufacturing, edge AI, and the longer-term electrification trend. Macroeconomic uncertainty and cautious capex remain headwinds. IDC forecasts growth of 11% for 2025, up from a decline of 13.9% in 2024.

Smartphone semiconductors supported by increase in content and higher revenue concentration in flagship smartphones

The wireless semiconductor market is forecasted to grow modestly by 5%, supported by increased content rather than unit growth. Semiconductor content per device continues to increase with the adoption of 5G penetration, AI-enabled features, and richer multimedia capabilities. ASPs are rising as OEMs integrate NPUs, GPUs, and connectivity to support on-device AI. Trade restrictions and tariff policies may distort shipment timing and impact pricing for consumers in 2026.

“2025 continues the strong growth from 2024, but markets that declined in 2024 such as automotive and industrial are only now starting to recover,” said Nina Turner, research director, Semiconductors at IDC. “While these markets are not experiencing the explosive growth of the datacenter, the increase in semiconductor content per system, increased compute capabilities, and electrification will help ensure long term revenue resilience for those markets and a higher portion of overall revenues for the market.”

“The semiconductor industry is entering a new era of growth, fueled by the datacenter buildout to support AI workloads. Explosive demand for compute and networking at scale is creating a step-function in revenue growth, while adjacent markets from cloud to connectivity benefit from the shift to rack-scale systems allowing semiconductor suppliers to move of the value stack. The overall industry is set on a strong trajectory that extend well beyond 2025,” said Mario Morales, group vice president, Semiconductors at IDC. “IDC forecasts that the semiconductor market will become a trillion-dollar market by 2028; almost two years faster than consensus.”

The IDC Worldwide Semiconductor Technology Supply Chain Intelligence (STSI) service provides the basis for IDC's semiconductor supply-side research, including market forecasts and custom market models. The service includes foundry and automotive semiconductor coverage and revenue data collected from over 150 of the top global semiconductor companies, with forecasts across semiconductor devices, regions, and industry segments.