According to the data released by the World Semiconductor Trade Statistics Organization (WSTS), in 2024, global semiconductor sales will reach $627.6 billion, an increase of 19.1% compared with $526.8 billion in 2023, successfully breaking through the $600 billion mark, a record high. In terms of quarterly data, sales in the fourth quarter of 2024 were $170.9 billion, up 17.1% year-on-year and 3.0% quarter-on-quarter. However, in December, sales were $57 billion, down 1.2% from November.
In 2024, logic product sales will reach $212.6 billion, making it the highest-selling product category. With the rapid development of emerging technologies such as artificial intelligence, big data, and cloud computing, higher requirements have been put forward for data processing capabilities. As a key component of data processing, computing and control, logic chips are widely used in many fields such as data centers, smart phones, and smart cars. Taking data centers as an example, in order to meet the growing demand for massive data storage and processing, data centers are constantly upgrading their hardware facilities, among which high-performance logic chips have become the core components. At the same time, the increasingly powerful functions of smart phones, such as multi-camera, 5G communication, artificial intelligence voice assistant and other functions, are inseparable from the improvement of the performance of logic chips, which also promotes the growth of logic product sales.
Memory product sales were $165.1 billion, an increase of 78.9%, ranking second among all product categories, of which DRAM products, a subcategory of memory, increased sales by 82.6%, the largest increase among all product categories. The growth of the memory market is mainly due to the explosive growth in the fields of artificial intelligence and big data. In the process of AI training and inference, a large amount of data needs to be read and stored quickly, which puts forward extremely high requirements for the speed and capacity of memory. High-bandwidth memory (HBM), a new memory technology, has played a key role in DRAM growth, accounting for 13.6% of total DRAM revenue in 2024. With the continuous expansion of AI applications, such as the commercial application of generative AI, the demand for data processing speed and storage capacity has further increased, which has led to a significant increase in the sales of memory products. In addition, with the popularization of 5G technology, the number of IoT devices is growing explosively, and these devices also need a large amount of memory to store and process data, which further drives the market demand for memory products.
Figure: Global semiconductor sales will grow by 19.1% in 2024; Double-digit growth is expected in 2025
Other segments
Semiconductor design: Semiconductor equipment will grow in 2024 with high quality. The delivery cycle of semiconductor equipment is long, and the contract liabilities can expect future growth to a certain extent. Contract liabilities at the end of June 2024 were RMB18.12 billion, a further increase from RMB15.88 billion in the same period last year. At the same time, the revenue growth rate of the semiconductor equipment industry is higher than the growth rate of non-profit, which is mainly due to the rapid growth of R&D expenses. Semiconductor equipment as a bottleneck link, the urgency of domestic substitution prompted enterprises to increase R&D investment, the first half of the year's total R&D expenses of 5.21 billion yuan, compared with 3.45 billion yuan in the same period last year, a year-on-year increase of 51%. With the recovery and expansion of the global semiconductor industry, the demand for semiconductor equipment is also increasing, driving the growth of the field.
Integrated circuit packaging and testing: one of the sectors with the largest year-on-year increase in non-net profit. Its strong growth is due to the development of high-end products, and China's integrated circuit packaging and testing industry can participate in the downstream division of labor of advanced processes. This round of AI-driven semiconductor demand is mainly driven by the demand for advanced manufacturing processes. Taking Tongfu Microelectronics as an example, relying on years of cooperation and first-mover advantages with leading enterprises in the industry such as AMD, and based on the growing demand for high-end processors and AI chip packaging and testing, the company's high-performance packaging business maintained steady growth in the first half of the year. At the same time, with the increase of AI and industry innovation opportunities, the industrialization of artificial intelligence has entered a new stage, and the company has actively expanded the Penang factory to meet the needs of customers in an all-round way in line with the opportunity period requirements of AI development of leading customers such as AMD.
Digital chip design: growth is closely related to the recovery of the consumer electronics industry chain. According to data released by the China Academy of Information and Communications Technology, in the first six months of this year, 147 million mobile phones were shipped in the domestic market, a year-on-year increase of 13.2%. The recovery of the consumer electronics market has led to an increase in orders from digital chip design companies. The increasing demand for digital chips in consumer electronics such as smartphones and tablets are driving the development of the digital chip design field. For example, in smart phones, digital chips are used in image signal processing, audio processing, communication baseband processing and other aspects, with the improvement of mobile phone camera pixels, the enhancement of audio functions and the application of 5G communication technology, the performance and functional requirements of digital chips are getting higher and higher, prompting digital chip design companies to continue to innovate and develop.
Semiconductor market trends in 2025
Continued growth
The U.S. Semiconductor Industry Association believes that global semiconductor sales will record another double-digit percentage growth in 2025. A number of authoritative institutions predict that the semiconductor market will grow by 11%-14% in 2025, and the market size will reach 697 billion to 717 billion US dollars. The continuous penetration of artificial intelligence is still the core growth driver, and the commercial application of generative AI will drive the demand for semiconductors in data centers to continue to grow, and the growth rate of logic chips is worth looking forward to. With the in-depth application of artificial intelligence in various fields, such as smart security, smart home, smart healthcare, etc., the demand for logic chips will continue to increase.
Regional growth differences
The Americas market is expected to continue to dominate growth with a 15% increase in sales due to the centralized layout of AI data centers. However, sluggish demand in the traditional consumer electronics and automotive sectors could weigh on segments such as analog semiconductors. Uneven regional growth may also exacerbate supply chain tensions. In the global semiconductor supply chain, there are differences in the level of industrial development and market demand in different regions, which may lead to a mismatch between supply and demand between the upstream and downstream of the supply chain, which in turn affects the development of the entire semiconductor industry. For example, the unstable supply of semiconductor raw materials in some regions may affect the production schedule of semiconductor manufacturers in other regions.
The growth of the semiconductor market in 2024 will benefit from different driving factors in various segments, and in 2025, while maintaining growth, the semiconductor market will also face new opportunities and challenges, and technological innovation and market demand will continue to be the core driving force for the development of the semiconductor industry.
