The semiconductor industry ended 2024 with a striking 19% growth, surpassing expectations to reach US$627 billion in sales.

Projections for 2025 indicate another record-breaking year at US$697 billion, placing the sector firmly on course to meet the US$1 trillion target by 2030.

This trajectory implies a 7.5% compound annual growth rate between 2025 and 2030, with the potential to hit US$2 trillion by 2040.

Investor confidence reflects these expectations. As of mid-December 2024, the top 10 global chip companies collectively reached a market capitalization of US$6.5 trillion, a 93% rise from 2023 and 235% higher than in 2022.

However, generative AI chipmakers outpaced this average, while companies without AI exposure, such as those in automotive or smartphones, underperformed.

Generative AI chips, which include CPUs, GPUs, memory, and power components, were initially forecast by Deloitte to reach US$50 billion in 2024.

In reality, they likely exceeded US$125 billion, accounting for over 20% of total chip revenues. For 2025, estimates now place this market at over US$150 billion.

AMD CEO Lisa Su projects that the total addressable market for AI accelerators alone could reach US$500 billion by 2028.

Despite these headline figures, wafer utilization tells a more nuanced story. Although gen AI chips generate high revenues, they occupy a small volume: in 2024, they represented less than 0.2% of total wafers sold.

Total chip shipments declined by 2.4% in 2024, even as revenues surged. In 2025, wafer shipments are expected to rebound nearly 10%, largely due to gen AI-related demand for advanced packaging and technologies like chiplets.

From Data Centers to Edge Devices: Gen AI Chip Demand Diversifies

High-performance gen AI chips, once limited to data centers, are now being integrated into edge environments.

Enterprises are moving toward on-premises AI infrastructure to reduce costs and meet data sovereignty rules.

Deloitte estimates that this enterprise edge market could be worth tens of billions globally in 2025.

Consumer markets are also adapting. About half of all PCs sold in 2025 are expected to be gen AI-enabled.

Some of these PCs include neural processing units (NPUs) that deliver over 40 trillion operations per second (TOPS), a benchmark for AI capability.

While these machines carry a 10%–15% price premium, adoption is expected to increase with newer NPU releases later in the year.

Smartphones, with forecasted annual sales of 1.24 billion units, are another key frontier.

Although gen AI silicon in phones is valued under US$1, Deloitte predicts 30% of smartphones sold in 2025 will feature AI chips.

The challenge for manufacturers is reigniting consumer excitement and shortening the replacement cycle, which has stalled in recent years.

The Internet of Things (IoT) could be a long-term opportunity.

While gen AI chips for IoT would need to cost as little as US$0.30 a target, not yet feasible, tens of billions of AI-enabled endpoints make it a compelling future market.

AI-Powered Chip Design Shifts Left in 2025

In 2025, semiconductor design is embracing a “shift-left” methodology, bringing testing and validation earlier in the development process.

AI now accelerates chip iteration and optimization, moving beyond traditional power-performance-area (PPA) metrics to system-wide indicators like performance per watt and thermal output.

The use of graph neural networks and reinforcement learning is enabling faster, more energy-efficient designs.

Digital twins are gaining traction, simulating chiplet configurations and enabling hardware-software co-design at the earliest stages.

Customized chips tailored for domain-specific applications, such as automotive or specific AI workloads, are rising in prominence.

While expensive to develop, generative AI tools are helping reduce time-to-market and enabling greater product differentiation.

In parallel, cybersecurity is becoming integral to chip design, with early testing of secure boot features and encryption engines now standard practice.

Talent and Supply Chain Challenges Intensify Amid Geopolitical Shifts

By 2030, the semiconductor industry will need one million additional skilled workers.

As of 2025, the shortage remains acute, exacerbated by an aging workforce in the U.S. and Europe.

Onshoring and reshoring initiatives are being slowed by labor constraints, while friendshoring strategies demand a broader global talent base, especially in Malaysia, India, Japan, and Poland.

AI may offer partial relief through automation and intelligent systems, but companies must still invest in workforce development.

Deloitte recommends closer collaboration with educational institutions and the integration of AI-powered workforce planning tools for strategic decision-making.

Geopolitical risks continue to pressure supply chains. New U.S. export controls introduced in December 2024 and January 2025 now target inspection and metrology technologies, with over 100 new Chinese entities added to the restricted list.

The "small yard, high fence" policy aims to restrict high-end chip technology exports, while China has retaliated by limiting exports of critical materials like gallium and germanium.

Climate events are also disrupting supply chains. Hurricane Helene in 2024 temporarily halted production of ultra-high-purity quartz, vital for semiconductor manufacturing.

With 75% of DRAM memory made in South Korea and ongoing global conflicts, industry leaders are closely monitoring supply concentration risks.

Despite challenges, the global semiconductor supply chain remained resilient in 2024.

But with gen AI chips potentially accounting for half of all chip sales in 2025, the stakes and vulnerabilities have never been higher.

Discover the Top 10 Semiconductor Trends in 2025

Today, chip-making relies on sophisticated, expensive, and highly polluting processes.

This necessitates critical changes from architectural design to sustainable materials and end-to-end fabrication to meet the growing demand for semiconductors.

This report provides an overview of top semiconductor industry trends and innovations, including artificial intelligence (AI), the Internet of Things (IoT), 5G, advanced packaging, in-house production, and more.

These advancements enable the industry to ensure more sustainable and efficient operations.

Top 10 Semiconductor Technology Trends:

1. Internet of Things
2. Artificial Intelligence
3. Advanced Materials
4. Novel Architectures
5. Advanced Packaging
6. 5G
7. In-house Chip Design
8. Fabrication Technologies
9. Automotive Chips
10. Sustainable Manufacturing

Methodology: How We Created the Semiconductor Trend Report

For this trend report, the StartUs Insights Discovery Platform was used, covering over 5 million global startups, 20,000 technologies & trends, plus 150 million patents, news articles, and market reports.

Each trend includes two startup examples based on relevance, founding year (2020–2025), company size (max 200 employees), and geographic factors.

The process includes 40 hours of analysis to deliver actionable insights while highlighting innovation leaders in the semiconductor ecosystem.

PHOTO: UNSPLASH

This article was created with AI assistance.