The global semiconductor market is expected to grow by over 15 per cent in 2025, according to market intelligence firm IDC.
IDC explained that this growth will largely be driven by the rising demand for artificial intelligence (AI) and high-performance computing (HPC)
“AI continues to drive demand for high-end logic process chips and increases the penetration rate of high-priced high bandwidth memory (HBM),” said Galen Zeng, Senior Research Manager at IDC.
“The overall semiconductor market is expected to have double-digit growth in 2025,” Zeng added.
IDC predicts that major application markets, from cloud data centres to specific industry segments, will undergo upgrades, contributing to the boom in the semiconductor industry.
“The semiconductor supply chain, spanning design, manufacturing, testing, and advanced packaging, will create a new wave of growth opportunities under the cooperation between the upstream and downstream industries,” IDC said.
IDC has identified eight major trends shaping the semiconductor market in 2025. One of the most notable is the continued growth of AI, which is expected to drive a 15 per cent rise in the global semiconductor market.
The memory segment, in particular, is forecast to see a 24 per cent increase, largely due to the growing adoption of advanced products such as HBM3 and HBM3e, which are required for AI accelerators.
“In addition, the new generation of HBM4 is expected to be introduced in the second half of 2025,” IDC added.
The non-memory segment is also projected to grow by 13 per cent, driven by strong demand for advanced node integrated circuits (ICs) for AI servers, high-end mobile phone ICs, and WiFi7.
IDC’s report also highlights the expected 15 per cent growth in the Asia-Pacific IC design market in 2025, with applications spanning smartphones, TVs, and AI computing.
“Overall demand for IC design will increase as personal device demand picks up, and AI computing extends to a wide range of applications,” IDC said.
Meanwhile, Taiwan Semiconductor Manufacturing Company (TSMC) is expected to maintain its dominance in both traditional Foundry 1.0 and the evolving Foundry 2.0 industry.
“TSMC’s market share is projected to climb steadily from 59 per cent in 2023 to 66 per cent in 2025, far outpacing competitors such as Samsung, SMIC, and UMC,” IDC explained.
Another key trend is the growing demand for advanced semiconductor nodes. “The expansion of advanced nodes (below 20nm) is accelerating due to the demand for AI,” IDC said.
TSMC and Samsung are both investing heavily in advanced nodes, with TSMC continuing to build fabs in Taiwan and the US, while Samsung is focusing on 2nm technology in South Korea.
In the mature node market, IDC expects a recovery, with demand supported by consumer electronics and replenishment in the automotive and industrial sectors.
“Mature nodes (22nm-500nm) are widely used in consumer electronics, automotive, and industrial control,” IDC said.
“Foundry capacity utilisation is expected to increase by an average of 5 percentage points in 2025.”
2025 is also seen as a pivotal year for 2nm technology, with all major wafer makers expected to enter mass production.
“TSMC, Samsung, and Intel are focusing on 2nm development, with production ramping up by the second half of 2025,” IDC said.
The yield rate for 2nm technology will be closely watched as it simultaneously supports the production of key products like smartphone application processors (APs), mining chips, and AI accelerators.
The global packaging and testing industry is also undergoing restructuring, benefiting China and Taiwan.
“China’s foundry mature nodes capacity continues to grow, and the downstream OSAT industry is expanding in parallel,” IDC explained.
“Taiwan’s manufacturers are accelerating the layout of production capacity in Taiwan and Southeast Asia, while focusing on advanced packaging technology for AI chips.”
IDC forecasts that the packaging and testing industry will grow by 9 per cent in 2025.
Advanced packaging technologies like FOPLP (Fan-Out Panel-Level Packaging) are expected to grow rapidly, driven by demand from high-performance computing customers such as NVIDIA, AMD, and cloud service providers.
“TSMC’s CoWoS production capacity will expand from 330,000 wafers in 2024 to 660,000 wafers in 2025,” IDC added.
IDC also said that it expects double-digit growth in the semiconductor industry in 2025, but notes that the market must navigate several risks, including geopolitical issues, global economic policies, and fluctuations in supply and demand.
“The industry will need to monitor multiple variables, such as trade tariffs, currency fluctuations, and interest rates, as well as new capacity additions,” IDC concluded.
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