The semiconductor market recorded significant growth in the third quarter of 2024. AI data centers and capital expenditures in China are driving this.
🟦Significant growth in the semiconductor market in the third quarter of 2024! Driven by AI demand and memory investment
The semiconductor market in 2024 recorded a growth of 12% in the third quarter. In particular, the recovery in the memory market and the demand for AI data centers are the major drivers of growth. Memory-related capital expenditures increased 34% quarter-on-quarter, and overall capital expenditures grew 31% year-over-year. This growth has also led to a recovery in semiconductor manufacturing equipment and wafer production capacity, with a 2.0% increase in foundry and logic in the third quarter.
🟦 Background to Demand and Increased Investment Supporting Growth
This growth is supported by strong demand for investment in AI data centers and expansion of capital expenditures in the Chinese market. The proliferation of AI technology has surged the demand for semiconductors to support data processing capabilities. On the other hand, the recovery of the memory market in 2024 has once again shed light on a long-stalled sector. In addition, while the pace of recovery is slow in the consumer electronics, automotive, and industrial markets, lower interest rates are expected to improve consumer sentiment and further expand the market in 2025.
🟦Summary
While seasonal demand, increased AI-related demand, and capital expenditure in China will boost the market, the slow recovery in the consumer electronics and automotive sectors remains a challenge. However, if interest rates continue to decline after 2025, these sectors are expected to return to a growth trajectory.
Now that the evolution of AI technology is at the center of the market, overall growth is likely to be more sustainable as the application of technology to other fields progresses.
