Malcolm Payne, CEO of Future Horizons, predicts that the global chip market will continue to expand in 2025 and is expected to achieve double-digit growth. This means that the chip market will move towards a scale of $706 billion in 2025, but this growth path is full of uncertainties and challenges.
At the beginning of 2025, data released by the Semiconductor Industry Association showed a complex situation in the market. Semiconductor sales reached $54.9 billion in February, up 17.1% compared to the same period in 2024, but down from $56.5 billion in January. Such fluctuations are not accidental, and reflect the interweaving of factors in the market. From a regional point of view, the year-on-year growth of nearly 50% in the American market has become a key driving force for the increase in global sales, making the global chip market achieve a year-on-year increase of more than 17% for 10 consecutive months.
Looking ahead to the full year 2025, Future Horizons founder and CEO Malcolm Payne gave a cautiously optimistic forecast. He believes that based on the analysis of the quarterly growth rate model, the global chip market is expected to achieve double-digit growth this year, with a market size of more than $706 billion, but this growth may fluctuate between 6% and 16%. This forecast brings a glimmer of hope to the market, but it also comes with a number of caveats.
There are obvious concerns in the current chip market. In terms of inventory, a large backlog of inventory has become a "sword of Damocles" hanging above the market. The growth of market value is mainly based on the increase in average selling price (ASP) rather than the growth of product volume, which is not firmly rooted. Once the price correction is not sustainable, the market is likely to be in trouble.
image: Global semiconductor revenue
As an important growth engine of the chip market in recent years, AI data centers have also shown signs of slowing down. While AI continues to grow in popularity, there is still a long way to go before a truly AI product-driven market boom. The current slowdown in demand for AI data centers is inevitable, which has a direct impact on the growth of the chip market. In addition, recession talk in the U.S. economy has added uncertainty to the market. As the world's largest economy, fluctuations in the U.S. economy can have a knock-on effect on demand and supply chains in the global chip market.
Europe's performance in the semiconductor sector is also worth watching. Europe has a deep technological heritage and potential for innovation, but it has missed development opportunities many times in the past. Although there are many positive developments in semiconductor technology R&D and industrial development on the European continent, it has not been able to fully translate these advantages into market competitiveness. This not only affects Europe's own position in the global chip market, but also makes the development pattern of the global chip industry not reach the optimal state.
In a complex market environment, chip companies are faced with difficult choices. On the one hand, it is necessary to seize the opportunity of current market growth, increase R&D investment, and enhance product competitiveness to adapt to changing market demand; On the other hand, it is necessary to be alert to the risks brought about by market fluctuations, reasonably control inventory, optimize the cost structure, and deal with possible economic recessions and demand declines.
The goal of $706 billion in the chip market by 2025 seems to be close at hand, but it is actually full of challenges. Only by working together to solve the inventory problem, respond to changes in AI demand, stabilize the global economic situation, and fully tap the potential of various regions can the chip market achieve truly stable growth, otherwise this growth will always be in a fragile state and may face setbacks at any time.
