The semiconductor market is expected to grow by 11% to reach 104 trillion yen by 2025. Growing demand for generative AI is supporting market growth, and the industry as a whole is undergoing significant changes to compensate for sluggish demand for automobiles and smartphones.
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🟦 Semiconductor Market Expected to Grow to 104 Trillion Yen in 2025 – Generative AI Drives the Market
The semiconductor market in 2025 is expected to reach $697.1 billion (about 104 trillion yen), an 11% increase from the 2024 forecast. At the heart of this growth is generative artificial intelligence (AI). In particular, demand for compute semiconductors such as image processing semiconductors (GPUs) has surged, with a growth rate of 17% year-on-year, exceeding previous forecasts.
Nvidia is leading the way in this area, and the proliferation of AI-powered services is opening up new possibilities for the industry as a whole. On the other hand, demand for electric vehicles (EVs), smartphones, and personal computers continues to be sluggish, which has had a significant impact on growth.
🟦 Changes in supply and demand behind market fluctuations
This growth is driven by a surge in demand in certain sectors and a slump in others. While the demand for high-performance computing semiconductors required by generative AI is expanding, the growth of analog semiconductors and memory is slowing. For example, the growth rate of analog semiconductors, which are used to process temperature and camera images, has decreased. In addition, growth in memory semiconductors is modest.
- Analog semiconductors
- Forecast: 7% increase
- Latest forecast: 5% increase (lowered)
- Memory semiconductors
- 2024 year: 13% increase (modest growth)
By region, the Americas, where AI data centers are concentrated, has shown outstanding growth with a 15% increase, while the growth in the Japan and European markets is modest.
🟦Summary
While the proliferation of generative AI has created new growth opportunities for the semiconductor market, sluggish demand for smartphones and EVs has emerged as a challenge. The growth of the overall market is driven by high-performance computing semiconductors, with advances in AI technology holding the key.
The success of companies like Nvidia plays a key role in driving the demand for generative AI and compute semiconductors. This, in turn, is expected to maintain the growth trajectory of the semiconductor market as a whole.
