Global semiconductor revenue is forecast to reach 800 billion US dollars in 2025, according to the International Data Corporation’s (IDC) worldwide semiconductor technology and supply chain intelligence service.

This would represent a 17.6 per cent increase from 680 billion US dollars in 2024.

The growth follows a strong rebound last year when semiconductor revenue rose 22.4 per cent year on year.

IDC noted that momentum in datacentres remains the main driver for this expansion, with demand for accelerated computing, datacentre networking and associated infrastructure continuing to fuel revenue.

Other sectors, including clients, saw demand pulled forward during the first half of 2025 due to tariff-related uncertainty.

Adjacent markets that support datacentre adoption, such as rack-scale systems, high-speed interconnects, memory and advanced networking semiconductors, are also benefitting.

For the first time, one semiconductor company is expected to exceed 200 billion US dollars in annual revenue, underscoring the scale of datacentre-driven growth.

IDC forecasts the compute segment of the market will expand by 36 per cent in 2025 to 349 billion US dollars, with a compound annual growth rate of 12 per cent through to 2030.

Networking and connectivity are also expected to post robust gains, helping to alleviate performance bottlenecks caused by rapid adoption of new workloads.

IDC projects demand for datacentre networking and wired and wireless infrastructure semiconductors will grow by 13 per cent in 2025.

Cloud providers, telecommunications operators and enterprises are upgrading networks to deliver low-latency services.

The increase in workloads has created a bottleneck in data movement rather than compute, prompting hyperscalers and enterprises to accelerate investments in networking chips and optical interconnects.

Growth is expected to be driven by networking semiconductors such as high-capacity ethernet switches, SmartNICs and DPUs that offload tasks from CPUs and GPUs to improve efficiency in training and inference.

After nearly two years of correction, automotive and industrial semiconductor markets are showing signs of recovery.

The automotive sector, which was hit by excess inventory in 2024, is projected to grow by 3 per cent in 2025 as customer stock levels normalise, particularly in China.

Leading suppliers have reported sequential growth, although concerns remain for the second half of the year due to the expiry of subsidies in China, pricing pressures across supply chains, continued customer destocking and trade-related risks.

Despite this caution, the sector continues to be supported by rising semiconductor content per vehicle, the adoption of silicon carbide and gallium nitride in electrification and power systems, the shift toward domain and zonal controllers and the emergence of software-defined vehicles.

The industrial semiconductor market has already rebounded in the first half of 2025, with suppliers reporting sequential growth, stronger backlog visibility and renewed momentum.

IDC forecasts industrial growth of 11 per cent for the year, compared with a decline of 13.9 per cent in 2024.

Growth in this sector is expected to come from military and aerospace applications, manufacturing, edge technologies and the long-term electrification trend, although macroeconomic uncertainty and restrained capital expenditure remain headwinds.

Wireless semiconductors are also expected to grow modestly, supported by increased content in devices rather than unit sales.

IDC forecasts this segment will rise by 5 per cent in 2025.

More advanced features, including 5G adoption, richer multimedia capabilities and on-device processing, are increasing semiconductor content per smartphone.

Average selling prices are climbing as manufacturers integrate neural processing units, graphics processors and connectivity enhancements.

However, IDC warned that trade restrictions and tariff policies could affect shipment timing and consumer pricing in 2026.

“2025 continues the strong growth from 2024, but markets that declined in 2024 such as automotive and industrial are only now starting to recover,” said Nina Turner, research director, Semiconductors at IDC.

“While these markets are not experiencing the explosive growth of the datacentre, the increase in semiconductor content per system, increased compute capabilities, and electrification will help ensure long term revenue resilience for those markets and a higher portion of overall revenues for the market,” she added.

“The semiconductor industry is entering a new era of growth, fueled by the datacentre buildout to support workloads,” said Mario Morales, group vice president, Semiconductors at IDC.

“Explosive demand for compute and networking at scale is creating a step-function in revenue growth, while adjacent markets from cloud to connectivity benefit from the shift to rack-scale systems allowing semiconductor suppliers to move up the value stack. The overall industry is set on a strong trajectory that extend well beyond 2025,” he added.

IDC forecasts that the semiconductor market will become a trillion-dollar industry by 2028, almost two years earlier than consensus estimates.