Market Analysis

Shaky fundamentals stunt Penn’s 2025 chip forecast

Malcolm Penn, CEO of Future Horizons, is forecasting a slowdown in global semiconductor growth in 2025.

He is predicting 14 per cent growth in 2025, down from 2024’s 19.2 per cent growth, a spurt that took the market value to $629 billion, the first time the industry has cracked the $600 billion barrier.

Last year’s advance was based on a surge in average selling prices in the second half of the year, and demand on what Penn describes as “the myopically narrow foundation of GPUs and high bandwidth memory demand and mass AI hysteria.”

“Unit demand remained pitifully low, due to stubbornly high inventory levels,” commented Penn.

“And while year on year comparisons look good, the month on month data lacks momentum.”

“It is heart v head,” Penn remarks, “the headlines proclaim boom, the data says no.”

Flashing red warning lights on the industry’s fundamentals, or what Penn calls, “the semiconductor industry’s four horsemen of the apocalypse” are tempering Penn’s expectations for 2025.

He cites a sluggish global GDP pretty much flatlining at 3.2% according to the IMF alongside geo-political tensions.

Lower unit demand with no recovery in immediate sight, softening average selling prices and concerns over excess capacity, exacerbated by a Capex spend in China, which exceeds domestic requirements all play into Penn’s forecast.