The global semiconductor industry is projected to grow by over 10% this year and may potentially exceed a market value of US$1 trillion by 2030.

This forecast was provided by Kevin Zhang, deputy co-COO at Taiwan Semiconductor Manufacturing Co. (TSMC), during a conference in Hsinchu on May 15, 2025.

Zhang said demand for AI chips, particularly those manufactured using 5, 4, and 3-nanometer processes, is expected to remain strong in 2025.

He also noted continued growth in markets for smartphones, computers, and internet of things (IoT) devices despite ongoing challenges in the automotive sector.

🔗 Source: Focus Taiwan

🧠 Food for thought

1️⃣ AI is restructuring semiconductor market dynamics at unprecedented speed

The semiconductor industry’s shift toward AI is happening more rapidly than previous technology transitions like PCs or smartphones, with more concentrated benefits.

TSMC predicts AI applications will make up 45% of all semiconductor sales by 2030, fundamentally reshaping the industry’s focus and revenue streams 1.

This concentration is already visible in market valuations, with the top 10 semiconductor companies reaching a combined market capitalization of US$6.5 trillion in December 2024—a 93% increase in just one year 2.

Generative AI chips alone are expected to account for over $150 billion in semiconductor revenue in 2025, showing how quickly this segment has become a dominant market force 2.

Unlike previous technology cycles that distributed growth more broadly, AI is creating winner-take-most dynamics, with Nvidia capturing the largest share at $2.48 trillion market capitalization 3.

2️⃣ The trillion-dollar milestone requires sustained growth amidst cyclicality

The semiconductor industry’s projected path to US$1 trillion by 2030 represents more than doubling its size since 2018, when it was valued at $481 billion 4.

Multiple forecasts converge on similar near-term projections: WSTS predicts 11.2% growth in 2025 reaching US$697 billion, while Deloitte independently forecasts the same US$697 billion figure 5, 2.

The industry needs to maintain a compound annual growth rate (CAGR) of 7.5% through 2030 to reach the trillion-dollar milestone, requiring consistent growth through the industry’s historically cyclical patterns 2.