2025 Semiconductor Market Forecast: Reliance on AI

According to a report released by Nikkei, the global semiconductor market in 2025 will continue to rely heavily on artificial intelligence (AI). Demand from generative AI data centers continues to grow, while demand from electric vehicles (EVs) and smartphones continues to stagnate.The supply and demand for AI-specific semiconductors are expected to remain tight in 2025.On one hand, the demand for semiconductors in generative AI data centers is surging, with significant growth in the GPU and HBM markets. It is projected that the GPU market will quadruple by 2029, and the HBM market will triple by 2030. On the other hand, the semiconductor markets outside of AI applications, such as automotive and industrial equipment, are recovering slowly. EV sales are facing obstacles in Europe and the US, leading to a continued decline in demand for automotive semiconductors. Renesas Electronics has postponed its power semiconductor mass production plans, and STMicroelectronics has delayed its sales target timeline.The semiconductor market for personal computers and smartphones, which previously faced oversupply, saw some relief in the April-June period due to inventory adjustments and increased demand for AI products. However, the overall market recovery remains weak after July. The construction of new semiconductor factories globally may lead to overcapacity, while China's accelerated domestic production also raises concerns about supply surplus.The World Semiconductor Trade Statistics (WSTS) forecasts that the global semiconductor market, driven by AI-specific semiconductors, is expected to grow by 11% in 2025 compared to 2024, reaching $697.1 billion.

Interpretation of the Financial Reports of Nine Semiconductor Giants: Signals of Industry Divergence and Future Trends

At the beginning of 2025, the financial reports of nine semiconductor giants highlighted industry divergence and future trends. Companies like TSMC, SK Hynix, ASML, Qualcomm, and Arm showed strong growth, particularly in AI chips, high-performance computing, and automotive electronics. However, STMicroelectronics, Intel, NXP, and Infineon faced challenges, including declines in analog, MEMS, and sensor businesses, as well as reduced demand due to inventory buildup.The memory chip market is rebounding, with SK Hynix reporting significant revenue and profit growth, driven by rising demand from data centers and consumer electronics. While some sectors, such as industrial and IoT, underperformed, the semiconductor industry in 2025 is expected to see a mix of challenges and opportunities, with AI, high-performance computing, and automotive electronics remaining key growth drivers.

Source: International Electronics Market Intelligence (ESM China)

Global PC Market Sees Mild Recovery with 1.3% Annual Growth

According to preliminary data from Gartner, global personal computer (PC) shipments reached 64.4 million units in Q4 2024, a 1.4% year-over-year increase, marking the fifth consecutive quarter of growth. Full-year shipments are projected at 245.3 million units, up 1.3% from the previous year. Gartner analyst Ranjit Atwal highlighted that high prices for AI-enabled PCs and economic uncertainties in some regions have tempered demand.The PC market is expected to grow steadily in 2025, with the top six vendors maintaining their rankings but showing mixed performance. HP and Dell are likely to see slight declines, while Lenovo has achieved growth for five consecutive quarters. Regionally, the U.S. market grew by 3.5%, while the EMEA market fell into recession again, and China experienced a 12% year-over-year decline.

Source: International Electronics Market Intelligence (ESM China)

NXP Semiconductors Announces $307 Million Acquisition of U.S.-based Kinara

NXP Semiconductors has announced the acquisition of Kinara, a U.S.-based company, for $307 million. Kinara specializes in the development of Neural Processing Units (NPU) and related software, which are widely used in edge AI applications. In recent months, NXP has completed three acquisitions within just two months: Austria’s TTTech Auto, the U.S.-based Aviva Links, and now Kinara, with a total transaction value exceeding $1.2 billion. These acquisitions aim to strengthen NXP's competitiveness in automotive chips, edge computing, and the Internet of Things (IoT). Through this latest acquisition, NXP will gain Kinara's advanced technology and expertise, further enhancing its capabilities in artificial intelligence.

Source: Sina Finance (finance.sina.cn.)

Q1 Revenue Forecast Down 25%, Onsemi to“Streamline” Operations
Onsemi has reported its financial results for the fourth quarter of 2024, showing a revenue of $1.73 billion, down 14.6% year-over-year and below market expectations. The company expects its revenue for the first quarter of 2025 to further decline to between $1.35 billion and $1.45 billion, representing a drop of approximately 24.8% compared to the first quarter of 2024.Onsemi CEO Hassane El-Khoury stated that the company will streamline operations to improve efficiency and reduce costs. While cautious about the 2025 market outlook, Onsemi remains confident in its long-term strategy, focusing on financial discipline and operational simplification to address potential market risks.

Source: International Electronics Market Intelligence (ESM China)

10 Automakers in January: Leading Enterprises Remain Strong

According to the sales data released by the China Passenger Car Association, the domestic passenger vehicle market experienced significant fluctuations in January 2025, with both year-on-year and month-on-month declines. A total of 2.101 million new vehicles were sold nationwide in January, down 0.3% year-on-year and 31.6% month-on-month. The overall competitive landscape shows clear differentiation, with domestic brands gaining a strong overall advantage and robust growth momentum. In contrast, joint venture brands are relatively weak, facing significant challenges amid the current new energy vehicle (NEV) consumption boom, and their market share continues to be eroded.After entering 2025, BYD made a major move in the intelligent driving field by launching 21 new intelligent driving models in one go, covering the market from the CNY 70,000 to CNY 200,000 segments. This move, along with BYD’s new slogan of “intelligent driving for all,” has undoubtedly had a major impact on the industry and has raised expectations for BYD’s market performance for the rest of 2025.

• Texas Instruments (TI) still has relatively ample inventory overall, with good supply conditions. However, lead times for some models have lengthened, though the overall impact remains minimal.
• Analysts indicate that Texas Instruments continues to seek a bottom, prompting further production cuts and pricing actions. Given the volatility in the industry and uncertainties in global trade, the industrial and automotive sectors “may bottom out in mid-2025.”However, the shape of the recovery remains unclear due to macroeconomic and geopolitical uncertainties.
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• ADI's Chief Financial Officer stated that Q1 order volumes continued to improve gradually. Strong performance in the industrial and automotive sectors is expected to drive both sequential and year-over-year growth for ADI in Q2. The company is confident that ADI will return to growth in fiscal year 2025.
• By business segment, ADI's industrial segment (+1%), automotive segment (+2%), and communications segment (+6%) achieved sequential growth, while the consumer segment posted a double-digit year-over-year increase of 19%.
• Looking ahead to the second quarter of fiscal 2025, ADI expects the industrial segment to lead the growth, with the automotive segment also showing an increase. However, the communications and consumer segments are anticipated to decline.
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• In February, for Intel's server product series, with the rapid development of generative AI technology, the demand for high-end AI servers continues to be strong. Due to the rapid growth in demand, the supply of Intel's third- and fourth-generation server products is tight. Factories producing the third-generation products have even canceled many discounts, and the ordering lead times have been extended. For Intel's notebook product series, demand for the 10th, 12th, 13th, and 14th generations is relatively strong, with higher shipment volumes for the 13th and 14th generations. The 15th generation attracts high-end users with its powerful performance.
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• In February, NXP's shortages were mainly concentrated in the MCIMX series and the TJA series.
• Compared to the previous month, NXP's demand volume remained flat in February. The proportion of MCUs and MCIMX series MPUs in overall demand still remained significant. Overall, demand remained weak. For general-purpose materials, market prices have largely returned to normal.
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• Jean-Marc Chery, President and CEO of STMicroelectronics, stated that overall performance was in line with the mid-point of business expectations. Although revenues from personal electronics increased, the decline in industrial product revenues offset overall revenue growth. Automotive products and CECP (communications, computing, and peripheral devices) met expectations. The order-to-shipment ratio in Q4 remained below 1, and the company’s performance continued to face pressure due to delayed industrial recovery, inventory adjustments, and slowing growth in the automotive sector, with these issues being particularly pronounced in Europe.
• STMicroelectronics reported full-year revenues of $13.27 billion in 2024, down 23.2% from 2023. The operating profit margin was 12.6%, compared to 26.7% in 2023, and net income was $1.56 billion, down 63.0% year-over-year.
• Despite revenue growth in personal electronics, STMicroelectronics indicated that declines in industrial product revenues offset overall revenue growth. The company attributed these challenges to ongoing delays in industrial recovery, inventory adjustments, and slowing growth in the automotive sector, which have been especially acute in Europe.
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• In February, TE's consumer connectors experienced a regional shift, with more products being sold overseas. The appreciation of the exchange rate led to a slight price increase, rendering many previous quotations invalid, as new prices exceeded the original ones.
• TE Connectivity announced strong financial results for the first quarter of fiscal 2025. CEO Terrence Curtin stated that the company's adjusted earnings per share (EPS) for the first quarter exceeded expectations, with adjusted operating profit margin and free cash flow for Q1 reaching record highs. In the Transportation Solutions segment, the company achieved robust performance despite a challenging global automotive production environment, driving innovation in electrification and next-generation vehicle data connectivity. In the Industrial Solutions segment, TE Connectivity saw double-digit sales growth and improved profit margins, driven by strong customer demand in artificial intelligence projects and continued strong performance in aerospace, defense, marine, and energy. Starting from fiscal 2025, the company will focus on two main solutions: Transportation Solutions and Industrial Solutions.
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• Broadcom's demand remained weak in February, with demand mainly focused on the BCM5 and SX series.
• Broadcom's communication chips are still in the destocking phase. The overall market is characterized by oversupply, with noticeable price inversion. The main shortages are concentrated in high-end chips, such as the BCM569 series. Although there is significant amount of market inquiries, the actual order conversion rate is very low. Broadcom's automotive chips are currently well-supplied, with prices returning to normal levels. Demand for Broadcom's AI chips continues to be strong, especially in the AI server and data center sectors. High-end AI chips like SS24 and SX05 are still in short supply. Broadcom's market prospects in the AI chip field are widely regarded as promising. The company expects that by fiscal 2027, the AI chip market will present a revenue opportunity of $60 billion to $90 billion.
• Overall, Broadcom still faces destocking pressure in the communication chip segment, while the automotive chip market has stabilized. AI chips are the core driver of future growth. Over the next three years, the AI chip market is expected to bring significant development opportunities for Broadcom, especially in the data center and cloud computing sectors.
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• In February, popular series included some Atmel MCUs.
• Demand for Microchip in February remained essentially flat compared to the previous month. Microchip continues to face overcapacity challenges, with ample market inventory but still sluggish demand and slow inventory digestion. Given the slower order turnover and its manufacturing restructuring plan, Microchip will close its Tempe wafer fabrication factory (Fab 2) to avoid further overcapacity.
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• Prices for Infineon’s analog and memory devices remain stable, with lead times shortening; discrete devices also show stable lead times and prices.
• Most of Infineon’s automotive-grade materials have returned to normal pricing, with limited demand for scarce components.
• Materials for AI-concept computers and servers are becoming tighter, and distributors predict some shortages in the communications segment. Infineon CEO Jochen Hanebeck noted that the company has performed well in a soft market environment, with Q1 results slightly exceeding expectations. After the anticipated inventory digestion, Infineon expects demand to gradually recover over the fiscal year. He emphasized that the growing popularity of AI applications is driving demand for Infineon’s leading AI data center power solutions, which he sees as the best example of driving the company’s long-term growth and advancing digitalization and decarbonization.
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• Recently, customer inquiries have mainly focused on: 1. Fairchild series; 2. NCP series; 3. MOSFET.
• Onsemi's demand is weak, with market price inversion, focusing on PPV opportunities. General material types have stable prices and sufficient market supply.
• In fiscal year 2024, Onsemi's revenue was $7.0823 billion, down 14.2% year-over-year. The decline in ON Semiconductor's performance is mainly due to the decrease in global automotive and industrial market demand, and there are currently no signs of recovery. ON Semiconductor stated that global economic uncertainty has led customers to cut orders for automotive chips, especially the weak demand for SiC chips required for battery-powered vehicles, and most customers are adopting a wait-and-see approach to new orders.
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DRAM Manufacturers Plan to Cease DDR3 and DDR4 Production by End of 2025; Low Power DRAM Prices Decline Gradually with Stable Demand

Reports suggest that the three major DRAM manufacturers may stop producing DDR3 and DDR4 by the end of 2025. This move could trigger early stockpiling by customers, and close attention should be paid to end-user demand. Currently, standard DRAM demand is weak, with significant inventory pressure at both manufacturers and distribution channels.Samsung: DDR3 and DDR4 supplies are ample, with prices declining, especially for 2GB and 4GB modules. DDR4 4GB prices remain stable, and confirmed orders are negotiable.SK Hynix: DDR4 16Gb prices have reached a new high of around 3.3, DDR48Gb prices are around 3.3, DDR48Gb prices are around 1.75.Micron: Significant stockpiling activity for DDR4 16Gb has been observed, reportedly ahead of a production halt. DDR3 selling pressure is still high, with prices going down.Nanya: Factory prices have softened, leading to lower market prices. Recent customer interest makes it a good time for price negotiations.Winbond: Follow the price reduction policies due to the frequent downward adjustments in market prices by the three major brands. It is not recommended to hold large inventories in the short term; a conservative approach should be adopted.Due to declining smartphone market demand, Low Power DRAM consumption remains weak. Manufacturers are reallocating capacity to high-value products like HBM. HBM3e is expected to replace HBM3 as the mainstream product. With its higher average selling price, HBM3e's revenue contribution is projected to grow quarterly as production expands. Manufacturers are shifting focus to such products, which will become a key driver for maintaining profits.

Samsung eMMC Prices Continue to Rise; Kioxia Follows Suit Amid Shortages and Price Hikes; Winbond and Macronix's NOR Flash prices show weak upward momentum, with slight declines

According to market reports, original manufacturers are expected to raise official prices again in March, driving another surge in market prices. Supply control and price hikes are occurring simultaneously. Although Samsung's last-buy date is set for June 2025, many stockists are still stocking up, pushing prices higher and making a short-term price drop unlikely.For Kioxia, driven by Samsung's price increases, demand has risen, leading to faster spot turnover. Many mainstream models are now out of stock, resulting in extended lead times. SanDisk is facing similar trends, with price adjustments and longer lead times for mainstream models. These products warrant close monitoring.In the NOR Flash segment, Macronix prices remain stable, with room for negotiation on confirmed orders. Winbond prices have seen a slight decline, with ample supply and opportunities for better pricing on large-volume orders.

DDR4/DDR5 Server Module: Price Increases Weaken; AI Server Demand Remains Key

By February, demand for AI-related servers had eased, leading to price declines. DDR4 server modules face significant selling pressure, with prices trending downward due to inventory releases from older data centers (DCs). DDR5 server modules have relatively better demand, but high official prices from manufacturers still result in price inversions. For PCs, recent factories have released some stocking demand, but most end-users remain pessimistic about future market conditions. They are imposing strict price requirements that are difficult to match with supply prices, making transactions challenging.

HDD：

In February, HDD inquiries mainly focused on 4TB, 8TB, 18TB, 20TB, and 24TB capacities, with a surge in demand for high-capacity models like 18TB, 20TB, and 24TB. However, due to highly transparent pricing, customer quotes are often close to hoarders' cost prices, making orders difficult to accept. Additionally, customers often specify product PN and FW versions. Notably, many overseas customers do not accept Western Digital's OEM products.

Server CPU：

Conventional server CPU demand is low, with most inquiries focused on EOL products, especially first and second-generation items. Currently, there are few channel stocks for E and D series products. Some end-users have long-term demand for specific models such as Silver 43XX, Silver 44XX, Gold 53XX, and Gold 54XX, and it is important to monitor if these customers are looking to sell these components. AMD EPYC CPU demand is limited, with the market mainly focusing on the 9004 and 7003 series. The previously popular 7713 model has seen no recent demand, prompting hoarders to liquidate stocks through price reductions.

PC CPU：

Overall, PC CPU prices are gradually declining, with exceptions such as the 12400 and 13400F models, which have seen price increases. The U200 series has shown mediocre performance and production capacity, while the 10th, 12th, 13th, and 14th generations have stronger demand. The 13th and 14th generations have more shipments, particularly the 14th, offer better value for money. For example, the price of the 14600KF has dropped by about 40% since September last year. Hence, Intel's 13th and 14th generations can be recommended to customers due to their price advantage over some X3D models and quality issues of the 9800X3D.

GPU：

The supply of RTX 5090 is tight, and the spot price has soared to $8,000, while the futures price in the Hong Kong market in mid-March has stabilized at around $4,000. The Chinese domestic market price has risen to 35,000 RMB including tax. Due to the quality problems of RTX 5090, stockists began to stock up in large quantities, resulting in a serious shortage of RTX 4090, and the price has risen to more than $2,500.

2024 Global Memory Sales Reach Record High; Q4 Market Share Rankings for DRAM/NAND Flash Released

In 2024, the global memory market hit a historic high of $167 billion in revenue, driven by strong demand for AI servers. The market achieved sequential growth throughout all four quarters. However, in Q4, DRAM and NAND Flash performance diverged due to weak demand in consumer applications.Specifically, the global NAND Flash market declined by 8.5% to $17.41 billion, with all major manufacturers reporting sequential revenue drops. This was attributed to slower eSSD procurement and subdued demand in mobile and PC applications, leading to sequential declines in both ASP (average selling price) and bit shipments.In contrast, the DRAM market grew 13.5% quarter-over-quarter (QoQ) to $29.345 billion, fueled by AI server demand for HBM and high-capacity DDR5. Samsung and SK Hynix achieved record-high storage revenues, although traditional DRAM sales declined. While ASP increased QoQ, bit shipments saw a QoQ drop.In terms of market share, Samsung led the DRAM market in Q4, followed by SK Hynix and Micron. In the NAND Flash market, Samsung held the largest share, with SK Hynix and Kioxia following closely behind.

Source：China Flash Market

DRAM Manufacturers Plan to Cease Production of DDR3 and DDR4 by End of 2025

According to a report by Nikkei, major DRAM manufacturers plan to halt production of DDR3 and DDR4 memory modules by the end of 2025. This move could lead to supply shortages after summer 2025, with market gaps likely to be filled by Taiwanese manufacturers.Nanya Technology predicts the DRAM market will bottom out in the first half of 2025, with recovery expected in the second quarter, driven by rising demand, improved inventory management, and global economic stimulus. While AI and cloud computing demand will remain strong, boosting edge computing, consumer demand is expected to see only marginal improvement despite regional stimulus measures.On the supply side, DRAM availability is projected to surge in 2025, with significant new capacity dedicated to advancing HBM and DDR5 technologies. The current low prices and weak demand for DDR3 and DDR4 reflect a strategic shift, as leading memory manufacturers reallocate resources to expand HBM production.According to inSpectrum data, DDR5 spot prices continue to rise despite the market downturn, while DDR4 prices remain stable. In contrast, DDR3 spot prices have been declining for several years.

Source: DigiTimes (digitimes.com)

Q1 NAND Flash Prices Continue to Decline; Suppliers Cut Production to Drive H2 Recovery

According to TrendForce, the NAND Flash market experienced oversupply and sustained price declines in Q1 2025, resulting in supplier losses. However, the supply-demand balance is expected to improve significantly in the second half of the year, driving a price recovery.Since 2023, the annual growth rate of NAND Flash demand has declined sharply. Major manufacturers initiated aggressive production cuts at the start of 2025, reducing annual output to lower the supply bit growth rate and alleviate supply-demand imbalances.Meanwhile, factors such as AI advancements and DeepSeek's innovations are set to boost NAND Flash demand. NVIDIA's planned expansion of Blackwell series shipments in H2 is expected to significantly increase Enterprise SSD demand. Additionally, DeepSeek's cost reductions in AI server deployment have spurred demand for PC SSDs and AI-enabled smartphones.In summary, the NAND Flash market's supply-demand dynamics are projected to improve markedly in H2 2025, leading to a price rebound.

Source: TrendForce

Western Digital and SanDisk complete split: HDD and SSD Businesses to Operate Independently

Western Digital Corporation finalized the spin-off of its flash memory business on February 22, 2025. The flash memory division has been established as an independent company named SanDisk, with David Goeckeler, current CEO of Western Digital, appointed as CEO of the new entity. Western Digital will now focus on its hard disk drive (HDD) business, led by Irving Tan, Executive Vice President of Global Operations. The spin-off aims to enhance market valuations, optimize resource allocation, and better address customer needs.Industry estimates value Western Digital's NAND and SSD businesses at 10 billionto to 22 billion. Post-spin-off, the combined valuation of the two companies is expected to reach at least 30billion, potentially exceeding 40 billion. Western Digital plans to accelerate the development of Heat-Assisted Magnetic Recording (HAMR) technology, with 36TB and 44TB HDD products slated for release in 2026. Meanwhile, SanDisk will focus on advancing NAND flash and SSD technologies, aiming to pioneer disruptive storage solutions.This spin-off represents a significant transformation in the storage industry, introducing new opportunities and challenges to the market.

Source: International Electronics Market Intelligence (esmchina.com)

Micron Launches PCIe 5.0 SSD 4600 Series, Setting New Read Speed Record to Revolutionize OEM Markets

Storage giant Micron has unveiled its PCIe 5.0 SSD 4600 series, designed exclusively for Original Equipment Manufacturers (OEMs) and not for direct consumer sales. The series features 276-layer stacked G9 3D TLC NAND flash technology, achieving a sequential read speed of up to 14.5 GB/s, setting a new industry benchmark.The Micron 4600 series comes in the M.2 2280 form factor and supports the NVMe 2.0c protocol. Compared to its predecessor, the 3500 series, it offers a 107% improvement in sequential read speed and a 71% boost in sequential write speed. In real-world applications, such as loading large language models like Llama2, the 4600 series delivers a 62% faster load time. Additionally, its random read and write efficiency is 2.07 times higher than PCIe 4.0 products, making it highly effective in data-intensive scenarios.Beyond its exceptional performance, the 4600 series excels in energy management, meeting the demands of high-end computing devices. This advancement in storage technology is expected to drive industry innovation, offering consumers more options and fostering continuous progress in the storage sector.

Source: Sohu (sohu.com)