The surging AI chip sales, especially in the generative AI field, continue fuelling semiconductors market growth, helping it recover from a challenging 2023 and hit new record highs.
According to data presented by AltIndex.com, the global semiconductors industry is expected to gross $607 billion in 2024, or 20% more than last year. This figure is forecasted to grow by over 65% in the next six years, with semiconductors becoming a trillion-dollar industry by 2030.
A Massive Milestone Despite the Revenue Growth Slowing Down
The semiconductor industry has exploded over the past years, practically doubling its revenue and helping the largest players in the market, including Nvidia, Taiwan Semiconductor Manufacturing, Samsung, and Intel, add trillions of dollars to their stock values. In 2016, the entire market grossed over $367 billion, according to a Statista survey. Despite the 15% drop in 2019, this figure jumped by almost 60% and hit $577 billion in the next five years.
However, the Statista survey brings just as optimistic market projections for the following years, with the semiconductors market reaching a new massive milestone. Although the annual growth rate will significantly slow down in the following years, slipping from 20% in 2024 to 7% in 2029, this pace of growth will still turn semiconductors into a trillion-dollar industry by 2030.
Most of that value will come from integrated circuits, expected to hit $850 billion in revenue by the end of a decade, 65% more than this year. Discrete semiconductors and optoelectronics follow with around $50 billion in revenue in 2029 each, 56% and 19% more than this year, respectively. Although far behind in revenue, the sensors and actuators segment will see the biggest growth in this period, surging by 69% to $31 billion by 2029. The semiconductor sales volume is projected to increase by 15% in this period, rising from 1.2 billion to over 1.4 billion units.
The Statista survey also identified several factors contributing to the growth of the semiconductor industry. GDP growth, the impact of inflation, and the growth of the automotive market are among the biggest positive contributors. These factors give the industry a positive outlook despite challenges such as falling demand for consumer electronics and memory chip oversupply.
Optimistic Market Projections Continue Driving Semiconductor's Stocks
The optimistic market projections for the following years have also significantly impacted semiconductor stocks, with some practically doubling their market caps year-to-date. In January, the combined market cap of Nivida, Taiwan Semiconductor Manufacturing, Broadcom, Samsung, and ASML Holding, the five largest semiconductor manufacturers globally, amounted to $2.9 trillion. Since then, this figure has jumped by an impressive $2.7 trillion and hit $5.6 trillion last week.
The world's third-largest tech company and the biggest semiconductor company by market cap, Nvidia (NVDA) saw the biggest gains, adding $1.8 trillion to its stock value in the past seven months. The market cap of Taiwan Semiconductor Manufacturing (TSM) jumped by $415 billion in this period and hit $954 billion last week.
Statistics show the US semiconductor manufacturer Broadcom added $331 billion to its stock value year-to-date and hit a market cap of almost $800 billion. The Duch-based ASML Holding follows with a $128 billion increase and $423 billion in stock value as of last week. Unlike these four companies, Samsung, the world's largest memory chip, smartphone, and TV maker, saw modest gains, adding one billion dollars to its market cap year-to-date.
