The global semiconductor market is expected to reach $1.6 trillion, or about 2,200 trillion won, this year, double last year's size, according to a new forecast. The projection points to growth well above earlier estimates even as global Big Tech firms have recently argued for slowing the pace of artificial intelligence development — the so-called AI slowdown argument — raising concerns about weaker demand for chips, including memory.
The Export-Import Bank of Korea's Overseas Economic Research Institute published the forecast on the 15th in its report on third-quarter information and communications technology (ICT) industry trends and outlook, industry sources said on the 20th. "The global semiconductor market will grow to $1.6 trillion (about 2,200 trillion won) this year on the steep growth of memory and logic chips," the bank said.
The forecast is twice the size of last year's market. It marks a 60% increase from the bank's own projection of $1 trillion (about 1,400 trillion won) presented just one quarter earlier. The bank also raised its 2030 outlook to $2 trillion (about 2,800 trillion won), double the $1 trillion (1,400 trillion won) it had forecast a year earlier.
The bank said demand for memory needed for AI computing continues to rise while supply shortages keep pushing prices higher, driving market growth. Memory chips such as DRAM and NAND flash are expected to account for 55% of the total semiconductor market this year, up sharply from about 30% last year. That share was also revised slightly higher from an initial forecast of 50%.
The DRAM market is projected to reach $519 billion (about 720 trillion won), 3.4 times last year's size, while the NAND market is seen growing 4.9 times to $360 billion (about 500 trillion won) over the same period. Growth forecasts were raised to 250% from 147% for DRAM and to 395% from 300% for NAND.
The bank expects the memory supply shortage to persist at least through next year. It said the DRAM shortage may not ease until the second half of next year or 2028, and the NAND shortage not until after the first half of next year. As a result, prices for commodity DRAM are expected to keep rising through the fourth quarter of this year and then hold steady at high levels through the first half of next year. NAND prices are also seen rising through the first quarter of next year and remaining flat through the end of the year.
"The semiconductor market is expected to grow on a structural increase in demand driven by AI," the bank said. "As Big Tech firms pursue long-term agreements (LTAs) of three to five years with memory chipmakers such as Samsung Electronics (005930.KS) and SK hynix (000660.KS), industry volatility will stabilize compared with the past."
Capital expenditure by the world's nine largest hyperscalers — operators of ultra-large data centers and the main customers for chips — is expected to rise 98% this year from last year. The initial forecast had been for an 80% increase. The analysis runs counter to concerns raised by the recent AI slowdown argument, indicating that chip demand from Big Tech firms will grow even more steeply.
Executives at four major AI developers — Anthropic, OpenAI, xAI and Google — recently warned in unison about the risks of AI and argued that model development should be slowed. Shares of global chipmakers, including Samsung Electronics and SK hynix, fell in response.
