Semiconductors

The semiconductor industry is the foundation of modern technology, involving companies that design and fabricate semiconductors and devices. It is a critical enabler for the electronics value chain, driving progress across various fields. The industry experiences continuous growth and cyclical patterns with high volatility, despite a substantial long-term average annual growth rate.

The semiconductor industry's performance is driven by the growth of AI and cloud infrastructure, advancements in consumer electronics, and the increasing use of semiconductors in the automotive sector. Technological innovations like 5G, IoT, and advanced materials are crucial for creating faster and more efficient chips, further boosting demand.

The semiconductor industry is dominated by key players from the United States, Taiwan, South Korea, Japan, and the Netherlands, including TSMC, Samsung, NVIDIA, Intel, and ASML. These companies operate under different business models, such as IDMs, fabless companies, and foundries. Competition is fierce, with companies striving to produce smaller, cheaper, and faster chips through innovation, scale, and access to niche markets.

The semiconductor industry experienced robust growth in 2024, driven by strong demand for memory and logic chips in AI and cloud computing. This momentum has continued into 2025, with projections anticipating further growth. The industry is on track to achieve $1 trillion in annual revenue by 2030, fueled by sustained demand for AI, cloud infrastructure, and advanced consumer electronics. Ongoing political and economic uncertainty could temper sales in the latter half of the year.

The semiconductor industry faces risks including geopolitical tensions, supply chain disruptions, natural disasters, economic fluctuations, rapid technological changes, cybersecurity threats, and a global talent shortage.