Hi, my name is Richard Gordon. I’m Vice President and Practice Lead for semiconductors here at The Futurum Group. Today, I’d like to talk a little bit about what’s going on in the semiconductor industry and we’ll maybe have two or three predictions as well. First of all, let’s start with the state of the industry right now at the end of 2024 and as we enter 2025.
Last year, the industry grew at around about 20% and that growth was driven by a boom in data center semiconductors, particularly AI chips and also from a boom in memory from the likes of Samsung, SK hynix, and Micron. The industry growth rate is going to slow down a little bit and we’ll probably see growth of around 10% this year overall.
It’s going to be driven, I think, by a pause in investment in the data center space and also a recovery in the rest of the market as supply and demand comes more into balance. So, the industry going from strong growth last year to slightly more moderate growth in 2025. As we head towards 2030, I think we’ll see another upcycle in the industry, pushing the market towards a trillion dollars or so in the early 2030 timeframe.
The second prediction I want to talk a little bit about has do with the technology roadmap. Over the past few decades in the industry, technology has been driven by Moore’s Law. Investment in semiconductor scaling is what drove chip performance and cost reduction. However, it’s increasingly challenging for companies to invest and keep into the Moore’s Law curve. Really, only the leading foundries and leading memory players can afford to do that these days. So, we’re going to see increasing investment in advanced packaging to drive the technology roadmap.
In fact, one of the equipment manufacturers reckons that by 2030 around a quarter of foundry revenue will come from the chiplet space. The benefit of chiplets is that semiconductor devices can be partitioned up into functional blocks and then recombined in advanced packaging so that there’s different types of semiconductors with different properties available in a single package.
The last thing I want to talk a little bit about is geopolitics. Of course, the industry is very much a globalized industry and has a globalized supply chain. But increasingly we’re seeing semiconductors seen as a driver of economic growth and also very important from a national security perspective.
So, what we’re going to see going forward is more onshoring of semiconductor design and manufacturing. We’re going to see increased technology transfer restrictions around the world and also increased tariffs and trade as well. That will not apply just to semiconductors, of course, it will apply to business more generally, but it will affect the semi space. So that’s a little bit of a look into what’s going on in the industry right now. If you want to find out more, you can download our e-book where we have some more detail on these predictions. That’s Futurum 2025, Key Issues and Predictions.
