Worldwide semiconductor revenue is forecasted to reach $800 billion in 2025, representing 17.6 percent growth from $680 billion in 2024, IDC said today. The growth follows a robust rebound in 2024, when revenue surged 22.4 percent year-over-year.
Mario Morales of IDC said the semiconductor industry is entering a new growth phase driven by AI-focused datacenter demand, and he expects the market to reach $1 trillion by 2028, nearly two years ahead of most forecasts.
Datacenter Momentum Powers Semiconductor Boom
The datacenter segment remains the biggest driver of semiconductor growth in 2025. Demand for AI infrastructure, accelerated computing, and datacenter networking is fueling unprecedented revenue expansion. IDC projects that, for the first time, a single semiconductor company will surpass $200 billion in annual revenue, underscoring the scale of AI-driven datacenter growth.
The compute segment alone is expected to grow 36 percent to $349 billion in 2025, with a 12 percent CAGR through 2030, boosted by rack-scale systems, high-speed interconnects, advanced networking chips, and memory solutions, according to the Worldwide Semiconductor Technology and Supply Chain Intelligence service from IDC.
Networking and Connectivity Alleviate AI Bottlenecks
With AI workloads shifting bottlenecks from compute to data movement, investments in networking semiconductors and optical interconnects are accelerating. IDC expects the networking and connectivity semiconductor segment to grow 13 percent in 2025. Key growth drivers include high-capacity Ethernet switches, SmartNICs, and DPUs, which offload networking tasks from CPUs and GPUs, ensuring more efficient AI training and inference.
Automotive and Industrial Markets Recover
After nearly two years of correction, automotive and industrial semiconductor markets are set to return to growth in 2025.
Automotive semiconductors: Forecasted to grow 3 percent in 2025, supported by rising chip content per vehicle, electrification using SiC and GaN, adoption of domain/zonal controllers, and the shift toward software-defined vehicles. However, risks remain from pricing pressures, trade uncertainty, and reduced subsidies in China.
Industrial semiconductors: Expected to grow 11 percent in 2025, rebounding from a 13.9 percent decline in 2024. Growth will be fueled by military and aerospace, manufacturing, edge AI adoption, and long-term electrification, despite ongoing macroeconomic uncertainties.
Smartphone Semiconductors Benefit from Content Growth
The wireless semiconductor market is projected to grow 5 percent in 2025, primarily due to rising semiconductor content per smartphone rather than unit sales. The adoption of 5G, AI-enabled features, and richer multimedia capabilities is driving up average selling prices. Integration of NPUs, GPUs, and advanced connectivity is boosting flagship smartphone revenue, even amid trade and tariff challenges.
Long-Term Growth Outlook
IDC emphasizes that while 2025 continues the strong trajectory from 2024, datacenter demand for AI workloads is the central catalyst, creating a step-function in semiconductor industry growth.
Shafana Fazal
