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Global Commodity Intelligence
Q2 2025 | APRIL - JUNE
Global Commodity Intelligence
Q2 2025 | APRIL - JUNE
ALERT: Semiconductor Market Poised for Robust Growth in 2024
Despite a substantial drop in global chip market revenue in January, the U.S. Semiconductor Industry Association (SIA) believes the global market continues to be poised for robust long-term growth.
The SIA is a trade association and lobbying group that represents the U.S. semiconductor industry, which is one of America’s top export industries and a key driver of America’s economic strength, national security, and global competitiveness. According to the SIA, the global semiconductor market is expected to grow by 8.4% in 2024 and 6.1% in 2025, reaching $603 billion in sales by the end of 2025.
In the initial month of this year, however, the global semiconductor market experienced an 18.5% year-to-year increase in revenue and a 5.2% sequential decline. On a regional level, year-to-year sales in Europe increased by 0.9% and in Japan by 0.7%. However, the Americas experienced a 12.4% decline, and the Asia Pacific/All Other region fell by 19.5%.
On a month-to-month basis, Europe saw a slight increase of 0.6% in January, while Japan decreased by 2.1%, Asia Pacific decreased by 2.7%, and the Americas by 7.9% from the previous month.
China exhibited the most significant year-over-year decline, with revenue falling by 31.6%, although on a month-to-month basis, the drop was a more moderate 8%. According to China's customs data, U.S. export controls were cited as impacting China's semiconductor industry, with chip import shipments falling by 27% in the first two months of 2023 and exports decreasing by 21% (over what period?).
The SIA characterized the current downturn as a temporary pause in the semiconductor market's growth trajectory. John Neuffer, President and CEO of the SIA, emphasized, “Despite the current short-term cyclical downturn, the long-term outlook for the semiconductor market remains strong due to the ever-increasing role of chips in powering the critical technologies of today and tomorrow.”
Looking Ahead
Central to the industry’s resurgence is the memory sector. The continued drive to incorporate Artificial Intelligence (AI) into data center applications will substantially lift the sector.
- The recovery is driven by surging demands in the memory market, especially in NAND flash and DRAM sectors, and by the growing need for chips supporting AI workloads in data centers.
- The market is expected to grow sustainably beyond 2024, fueled by the increasing integration of AI and machine learning in computing infrastructure.
Other key drivers for the expected recovery in the semiconductor market:
- The revival of the smartphone market, partly thanks to 5G and new AI functionalities.
- Advancements in automotive technology include Advanced Driver-Assistance Systems (ADAS), enhanced infotainment systems, and EV sales.
Looking ahead to the year's second half, it is forecast that semiconductor pricing will stabilize, excluding memory devices. However, extended lead times for specific semiconductors, such as programmable logic devices, and passive components, such as automotive-specific resistors, are expected to persist into the year's second half.
If you have any questions or require further information, please get in touch with me at josh_wilson6426@jabil.com.
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