The global semiconductor market looks set to grow 16% to $731.6 billion in 2025 according to Malcolm Penn, CEO of Future Horizons, in his September update.
This is a 1% uptick on his January forecast. His bullish forecast comes in at 17%, his bearish forecast sees 15% growth.
Penn cites signs of recovery in the discretes, analog, and optoelectronic sectors and strong annual growth rates, though he notes that these are price driven rather than unit driven.
“You can’t claim a real market recovery until unit growth returns,” states Penn.
He reckons there is still unknown excess inventory choking the supply chain, and a July rise in unit demand was driven by companies ordering to keep ahead of any tariff impositions.
It may be two more quarters before a balance is restored.
He has concerns too about China’s ability to flood the global market with mature node technology, most likely at competitive prices.
“Watch out too for a slowdown or hiccup in AI infrastructure demand,” warned Penn. “Keep praying the AI boom doesn’t crash and burn, I wouldn’t want to be around if that happens.”
His 2026 forecast for the global semiconductor industry stands at 12% with a best case 18% uptick and a worst case 6% outcome.
Penn concedes that given so many variables this forecast is a swag (scientific wild-ass guess if you are asking).
“You have to assume the US economy continues to defy gloomy expectations, and that geopolitics, tariffs and trade restrictions do not trigger a global slowdown,” says Penn, “and hope that AI data centre growth does not slow down, crash or burn, and that IC unit growth resumes in the first half of 2026.”
