Semiconductor growth slows down in 2025
The semiconductor market reached USD 166 billion in 3Q24, a 10.7% growth from 2Q24, according to the World Semiconductor Trade Statistics (WSTS). This marks the strongest QoQ growth since 3Q16 when growth hit 11.6%. On a YoY basis, the market grew by 23.2% in 3Q24, the highest since 4Q21's 28.3%.
Consulting firm Semiconductor Intelligence (SC-IQ) has looked at recent forecasts from several market intelligence firms for the semiconductor market in 2024 and 2025. The third quarter of 2024 was robust for most major semiconductor companies, while the outlook for 4Q 2024 shows diverging trends. As with the 4Q 2024 guidance, the outlook for 2025 is mixed.
In the third quarter, Nvidia retained its position as the largest semiconductor company with USD 35.1 billion in revenue, driven by its dominance in AI GPUs. While Nvidia's revenue includes contributions from external components such as memory from SK Hynix, Micron Technology, and Samsung, it would still top the leaderboard based solely on its own devices.
Samsung Semiconductor ranked second with USD 22.0 billion, buoyed by strong demand for memory in AI servers. Broadcom, benefiting from growth in AI-related semiconductors, came in third at USD 14.0 billion. Intel and SK Hynix rounded out the top five.
| Company | US$ billion 3Q24 | Reported 3Q24 | Guidance 4Q24 | Comments on 4Q24 | |
| 1 | Nvidia | 35.1 | 17% | 6.9% | Strong AI demand |
| 2 | Samsung SC | 22.0 | 6.4% | n/a | Server demand strong |
| 3 | Broadcom | 14.0 | 7.1% | n/a | 3Q is 2Q guidance |
| 4 | Intel | 13.3 | 3.5% | 3.9% | Inventory reductions continue |
| 5 | SK Hynix | 13.2 | 11% | n/a | AS server demand strong |
| 6 | Qualcomm (IC) | 8.7 | 7.5% | 7.2% | Strong China handset demand |
| 7 | Micron | 7.8 | 14% | 12% | Data centre strong |
| 8 | AMD | 6.8 | 17% | 10% | Data centre strong |
| 9 | Infineon | 4.4 | 5.9% | -18% | Excess inventory in auto |
| 10 | TI | 4.2 | 8.6% | -7.3% | Auto weak, inventory corrections |
| 11 | MediaTek | 4.1 | 3.6% | -1.0% | Decline in smart edge platforms |
| 12 | Kioxia | 3.4 | 12% | n/a | Data centre stron |
| 13 | STMicroelectronics | 3.3 | 0.6% | 2.1% | Auto down, inventory corrections |
| 14 | NXP | 3.3 | 3.9% | -4.6% | All segments down |
| 15 | Renesas | 2.4 | -3.8% | 19% | Inventory reductions, weak auto |
| 16 | Analog Devices | 2.4 | 3.8% | n/a | 3Q is 2Q guidance |
| Total of above | 10% | 3% | |||
Mixed outlook for Q4 2024
SC-IQ says that the Q4 2024 forecast suggests a divided market. AI-driven data centres are expected to sustain revenue growth for Nvidia, Micron, and AMD. Automotive-focused companies such as Infineon, Texas Instruments, and NXP Semiconductors anticipate revenue declines due to inventory reductions and a weak market. Smartphone-centric firms show varied expectations, with Qualcomm guiding a 7.2% increase while MediaTek projects a 1.0% decline.
The weighted average revenue growth for Q4 2024 is projected at 3%, with individual company forecasts ranging from +12% for Micron to -19% for Renesas.
Looking further ahead, the semiconductor market's growth is expected to decelerate in 2025. IDC projects AI-driven server growth at 11%, a slowdown from the 42% surge in 2024. Smartphones and PCs are anticipated to grow modestly, while the automotive sector faces continued challenges.
Memory market growth, a major driver in 2024, is likely to moderate as price increases stabilise. WSTS forecasts suggest that while memory grew 77% in 2024, non-memory segments only expanded by 2.6%.
Forecasts for 2024 and 2025
Industry forecasts for 2024 converge around 15% to 19% growth. For 2025, projections vary more significantly:
- RCD Strategic Advisors and Gartner expect steady growth at 16% and 13.8%, respectively.
- Semiconductor Intelligence (SC-IQ) predicts a sharper slowdown to 6%, citing tempered AI growth, stable memory prices, and weak automotive demand.
- Future Horizons similarly forecasts an 8% increase in 2025.
