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Gartner Forecasts Strong Semiconductor Market Recovery Driven by AI, Memory, and GPU Growth

[Oct 29, 2024] – The global semiconductor market is poised for significant growth in the coming years, fueled by the continued surge in demand for AI-related semiconductors and a recovery in electronic production, according to Gartner. While the automotive and industrial sectors remain weak, the overall market is expected to rebound strongly, with revenue projected to reach $716.7 billion in 2025, a 13.8% increase from 2024.

 

“The growth is driven by a continued surge in AI-related semiconductor demand and recovery in electronic production, while demand from the automotive and industrial sectors continues to be weak,” says Gartner analyst Rajeev Rajput.

 

Key Market Drivers:

 

Memory Market Boom: The worldwide memory revenue market is forecast to grow by 20.5% in 2025, reaching $196.3 billion. NAND flash revenue will total $75.5 billion in 2025 (a 12% increase from 2024), driven by a sustained undersupply in 2024 resulting in a 60% price increase, followed by a slight price decline in 2025. DRAM revenue is expected to reach $115.6 billion in 2025, up from $90.1 billion in 2024, due to improved undersupply, increased high-bandwidth memory (HBM) production, rising demand, and higher DDR5 prices.

 

GPU Dominance in AI: GPUs have been central to AI model training and development since 2023. GPU revenue is projected to reach $51 billion in 2025, a 27% increase. However, Gartner VP George Brocklehurst notes a shift towards a return on investment (ROI) phase, requiring inference revenues to significantly surpass training investments.

 

High-Bandwidth Memory (HBM) Explosion: HBM, a high-performance AI server memory solution, is experiencing explosive growth. HBM revenue is expected to surge by more than 284% in 2024 and 70% in 2025, reaching $12.3 billion and $21 billion, respectively. Gartner analysts predict that by 2026, over 40% of HBM chips will support AI inference workloads, compared to less than 30% currently. This is attributed to increased inference deployments and limited repurposing of training GPUs. Vendors are heavily investing in HBM production and packaging to meet the demands of next-generation GPU/AI accelerators.

 

Semiconductor Revenue Forecast (Billions of U.S. Dollars):

 

Year Revenue Growth (%)
2023 530.0 -11.7
2024 629.8 18.8
2025 716.7 13.8

 

Source: Gartner (October 2024)

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