Semiconductor Boom Is Getting Bigger Than AI

The semiconductor industry is entering a period of growth whose scale is beginning to far exceed the initial AI boom. From 2026 to 2030, the total addressable market for semiconductor components is expected to grow from $1.7 trillion to $3.2 trillion. Moreover, the next stage of expansion will be supported not only by data centers and memory, but also by automotive electronics, industrial automation, and other traditional areas.

So far, there are virtually no signs of a noticeable cooling in demand. Despite concerns that AI infrastructure is being overbuilt, there is no indication of a reduction in orders, long‑term contracts, or projects to build new data centers and production facilities. Moreover, 2027 is already almost fully contracted for most types of semiconductors, and analysts do not expect a significant improvement in product availability even in 2028.

Prices also remain high overall, though not uniformly so. DRAM and NAND prices have barely declined over the past week, and renting an Nvidia B200 accelerator costs approximately $5.72 per hour, down slightly from a March peak of $6.10. Computing power remaining this expensive indicates that supply still cannot keep up with demand.

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Particularly large‑scale changes are expected in the memory market. Its potential capacity could nearly double by 2030, from $937 billion to $1.8 trillion — a figure that would exceed the combined current market capitalization of the two largest cryptocurrencies, Bitcoin and Ethereum, based on the latest Bitcoin price and ETHUSD chart levels. The server segment could also grow from $359 billion to $848 billion, while the market for traditional semiconductor components could increase from $739 billion to $1.35 trillion.

However, the growth is gradually becoming more widespread. The automotive segment may grow by about one and a half times to $90 billion, and industrial automation from $65 billion to $99 billion. Even mature areas will continue to expand. The PC semiconductor market will grow from $55.8 billion to $68.7 billion, and the smartphone semiconductor market from $71.1 billion to $77.8 billion.

Financial results so far confirm that this scenario is developing faster than historical norms. In the second quarter, semiconductor industry revenue increased sequentially by 31.4% and reached a record $425 billion. In the first half of the year, companies have already earned $752 billion, and in the third quarter, the figure may exceed $500 billion for the first time.

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The main driver of growth remains memory, which accounted for 54% of the entire industry’s revenue in the second quarter — up from 45% the previous quarter and under 30% as recently as the third quarter of last year. Even excluding memory, the sector’s revenue still increased by more than 10%, against a historical seasonal norm of about 3%. Microprocessor sales grew by 16%, compared to a typical increase of about 1%. In other words, the current cycle is gradually spreading beyond a few of the most overheated segments.

However, for electronics manufacturers, the flip side of this growth is sharply rising costs. In smartphones, the cost of DRAM and NAND can already reach 60% of a device’s production cost, which is around $400. A 13.9% decline in the global smartphone market is expected this year, with the budget segment taking the brunt of the impact.

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Small manufacturers are particularly vulnerable. Framework is forced to order memory in advance, sometimes without having accurate information about the price, delivery times, or even the final supply volumes. Jolla has developed two versions of the motherboard to accommodate different memory configurations. For Apple, Samsung, and other major players, this situation, conversely, could accelerate market consolidation due to their stronger negotiating positions and ability to maintain margins through the premium segment.

Meanwhile, the huge demand is forcing the semiconductor industry itself to sharply increase capital expenditures. Manufacturers’ spending on equipment for chip production will grow from $155.9 billion to $359.8 billion by 2030.

Thus, the main financial question is no longer whether the AI boom has ended, but how far its consequences will spread throughout the economy. If the forecast proves accurate, the semiconductor industry will nearly double the available market in just four years. However, it will also require more than $200 billion in additional annual investments in production equipment and will continue to redistribute profits from end‑device manufacturers to suppliers of memory, computing components, and chip manufacturing equipment.