The global semiconductor domain is anticipated to expand by 9.5% in 2025, mainly fueled by demand for AI capabilities and data center chips, according to findings from ING. Though this forecast lags behind the 11.2% outlook from the World Semiconductor Trade Statistics (WSTS), it still surpasses the long-term growth projections from ASML (AS:ASML).

Key Growth Drivers in the Semiconductor Market

1. Demand for AI and Data Center Solutions

• NVIDIA Corporation (NASDAQ:NVDA) retains its lead in AI chip demands, even with recent disappointing earnings.
• Advanced Micro Devices Inc (NASDAQ:AMD) reports $5 billion in AI revenue for 2024, predicting robust growth in 2025.
• Taiwan Semiconductor Manufacturing Co (TW:2330) expects a mid-40% CAGR in AI accelerators, notably outpacing its overall forecast.

2. Surge in Custom Chip Demand (ASICs)

• The heightened requirement for application-specific integrated circuits (ASICs) in data centers will favor companies like:
• Broadcom Inc (NASDAQ:AVGO)
• Marvell Technology (NASDAQ:MRVL)
• This trend represents a competitive challenge for established chipmakers like Intel (NASDAQ:INTC) and AMD.

3. Memory and Logic Chip Expansion

• While ING anticipates short-term caution regarding memory chip pricing, demand for high-bandwidth memory (HBM) and cutting-edge logic chips remains consistent.

Sluggish Sectors in 2025

• Smartphones, PCs, and automotive chips face significant downward pressure due to pricing constraints and waning consumer interest.
• Samsung Electronics (KS:005930) has already lowered its outlook for AI semiconductors.

Market Prospects and Investment Dissection

• AI infrastructure and data centers persist as primary stimulants for semiconductor expansion and revenue flow.
• Investors may find prospects among AI leaders like NVIDIA, AMD, and TSMC, with firms capitalizing on bespoke chip needs like Broadcom and Marvell holding considerable promise.

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