AI and high-performance computing (HPC) will drive growth in advanced chips, 2nm technology, and packaging, reshaping the semiconductor industry in 2025, according to IDC.
Singapore, December 12, 2024 – Global demand for artificial intelligence (AI) and high-performance computing (HPC) will continue to grow, reaching 15% in 2025, according to IDC’s latest Worldwide Semiconductor Technology Supply Chain Intelligence report. It is predicted to increase by more than %. Key application markets, from cloud data centers to specific industry segments, are expected to be upgraded, ushering in a new boom in the semiconductor industry.
“The overall semiconductor market is expected to experience double-digit growth in 2025 as AI drives demand for high-end logic process chips and increases the penetration of expensive high-bandwidth memory (HBM). Supply Chain – This process spanning design, manufacturing, testing and advanced packaging will create a new wave of growth opportunities in collaboration between upstream and downstream industries,” said IDC Asia/Pacific Senior Research Manager, Galen Zeng said.
IDC also predicts eight major trends in the semiconductor market in 2025.
1. Rapid growth due to AI will continue next year
The global semiconductor market is expected to grow by 15% in 2025. The memory segment is expected to grow rapidly by more than 24%, mainly due to the increasing adoption of high-end products such as HBM3 and HBM3e required for AI accelerators, including the new generation HBM4 expected to be introduced in the second half of 2025. In the non-memory sector, demand is strong mainly for advanced node ICs for AI servers, high-end mobile phone ICs, and WiFi7. The mature node IC market is expected to recover, supported by the recovery in the consumer electronics market.
2. Asia-Pacific IC design market is heating up, expected to grow by 15% in 2025
The Asia-Pacific region’s IC design product line is rich and diverse, with applications across the globe, including smartphone APs, TV SoCs, OLED DDICs, LCD TDDIs, WiFi, PMICs, MCUs, ASICs, and other essential chips. We believe overall demand for IC designs will increase as inventory levels stabilize, demand for personal devices recovers, and AI computing expands to a broader range of applications.
3. TSMC will continue to dominate the Foundry 1.0 and Foundry 2.0 industries
Based on the traditional Foundry 1.0 definition, TSMC’s market share is expected to rise steadily from 59% in 2023 to 64% in 2024 and 66% in 2025, with Samsung, SMIC, and UMC significantly outperforms competitors such as TSMC’s market share in Foundry 2.0 (including foundry, non-memory IDM manufacturing, packaging and test, and photomask manufacturing) was 28% in 2023. Due to the significant increase in demand for AI-driven advanced nodes, TSMC’s market share for Foundry 2.0 is expected to grow rapidly in 2024 and 2025, with aggregate growth across both traditional and modern industrial structures. demonstrating a competitive advantage.
4. Strong demand for advanced nodes and accelerated foundry expansion
The demand for AI is accelerating the expansion of advanced nodes (<20nm). TSMC not only continues to manufacture 2nm and 3nm in Taiwan, but also manufactures 4/5nm that will soon be mass produced in the United States. Samsung is leveraging its experience in entering the GAA generation earlier and honing in on 2nm in Hwaseong, South Korea. Meanwhile, Intel is focusing on developing its 18A process under its new strategic plan and aims to acquire more external customers in the coming years. Overall, wafer manufacturing is expected to grow by 7% per year in 2025, and production capacity at advanced nodes is expected to increase by 12% per year. With average capacity utilization expected to remain above 90%, the AI-driven semiconductor boom is likely to continue.
5. Mature node market is warming up, with capacity utilization above 75%
Mature nodes (22nm to 500nm) have a wide range of applications covering consumer electronics, automotive, industrial controls, and other industry segments. In 2025, demand is expected to improve after this year’s correction and oversupply due to sporadic inventory replenishment in consumer electronics and automotive and industrial control sectors. Average capacity utilization for 8-inch fabs is expected to rise from 70% to 75% in 2024, and average capacity utilization for 12-inch mature nodes is expected to rise to over 76%. Foundry utilization is expected to increase by an average of 5 percentage points in 2025.
6. 2025 will be a big year for 2nm technology
2025 will be a key year for 2nm technology, with all three major wafer manufacturers entering 2nm volume production. TSMC is actively expanding its Hsinchu and Kaohsiung factories, and mass production is expected to begin in the second half of this year. Samsung is expected to follow past trends and enter production earlier than TSMC. Intel will focus on 18A, which already has a backside power delivery network (BSPDN) under strategic coordination. These three major companies will face significant optimization challenges using 2nm technology to balance performance, power consumption, and cost per area. In particular, with regard to 2nm technology, mass production of major products such as smartphone APs, mining chips, and AI accelerators will begin at the same time. By then, companies have improved their yields, and the pace of production increases is attracting the attention of the market.
7. Restructuring of the packaging and testing industry will greatly benefit China and Taiwan
Geopolitics is reshaping the global packaging and testing landscape. With the “semiconductor sovereignty” policy, the production capacity of China’s mature nodes of foundries continues to expand, and the downstream OSAT industry is also expanding in parallel, forming a complete manufacturing ecosystem. Meanwhile, Taiwanese manufacturers have shown other aspects of their industrial advantages, such as not only accelerating the deployment of production capacity in Taiwan and Southeast Asia, but also deeply cultivating advanced packaging technology for AI chips. . In 2025, China’s packaging and testing market share will continue to rise, and Taiwanese players will strengthen their packaging dominance with high-end chips such as AI GPUs. The overall packaging and testing industry is expected to grow by 9% in 2025.
8. Advanced Packaging: FOPLP Layout and CoWoS Production Doubling
As the functionality and performance requirements of semiconductor wafers continue to improve, advanced packaging technologies are becoming increasingly important. FOPLP is expected to grow rapidly from 2025 onwards. Currently, it is mainly based on glass-based processes and applied to PMIC, RF, and other small analog chips. With several years of technology accumulation, it is expected that FOPLP will be able to enter the AI chip market, which requires a larger mounting area, and be able to implement glass-based products that require more technical hurdles. Additionally, driven by demand from high-performance computing customers such as NVIDIA, AMD, AWS, Broadcom, and cloud service providers (CSPs), TSMC’s CoWoS production capacity continues to expand, reaching 330,000 units by 2024. Wafer to CoWoS-L product line will increase 100% annually to 660,000 in 2025 Wafers are increasing by 470% annually as the main driving force. Taiwan’s equipment supply chain, including wet etch, dispensing, crystal picking, and other major process equipment vendors, will have further growth opportunities with this wave of production expansion.
In summary, IDC expects the global semiconductor industry to experience double-digit growth in 2025, but the industry is sensitive to geopolitical risks, global economic policies, including industrial subsidies, trade tariffs, currencies, and interest rates. ), you need to overcome multiple variables such as the end goal. Market demand, changes in supply and demand due to the addition of new production capacity, are all important factors to watch in 2025.
For analyst insights and other IDC resources on semiconductors, visit this website. Click here to speak with an IDC analyst. For media inquiries, please contact Michael de la Cruz at mdelacruz@idc.com or Miguel Carreon at mcarreon@idc.com.
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About IDC
International Data Corporation (IDC) is one of the world’s leading providers of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC provides global, regional, and local expertise on technology and industry opportunities and trends in more than 110 countries. IDC’s analysis and insights help IT professionals, business executives, and the investment community make fact-based technology decisions and achieve key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading technology media, data and marketing services company. For more information about IDC, visit www.idc.com /ap. Follow IDC on Twitter @IDCAP and LinkedIn. Subscribe to the IDC Blog for industry news and insights.
