The Chip Insider®
The Chip Insider’s Strategic Forecast for 2025
Author: G. Dan Hutcheson
Explore key predictions and surprises shaping the semiconductor industry, from AI trends and IC sales growth to geopolitical shifts.
Now that 2024 is over, it’s clear that last year the forecasters were hardly optimistic enough: IC sales for the year are close to 29% at this writing… One of the things making the semiconductor market so difficult to forecast is that since 1995 the average annual growth has been 6% with a median near zero and a range of 70%. So… What most forecasters got wrong about last year was:
- Mobile’s return was weaker …
- Auto failed…
- AI PCs were a dud…
- AI failed to get out of the cloud and make it to the edge.
- AI/datacenter investments by hyper-scalars would continue to grow at hyper-scalar rates… With 20/20 hindsight the failures look obvious …
The Chip Insider’s Predictions and Surprises with a better-than-even chance of occurring before the end of the year mostly rang true, though not optimistic enough…
The Chip Insider’s Predictions and Surprises for 2025: TechInsights expects IC sales to grow 19% in 2025. Similar to last year, we expect the AI-haves to continue to be the big winners. The AI PC and mobile segments will primarily be driven by replacement cycles rather than innovation… There will be challenges …
Macroeconomic: The US economy should continue to stay strong … That said, any effect at our levels of the supply chain of policy shifts should not be seen until 4Q2025 at the earliest…
Geopolitical: Tensions will rise to red-hot this year, simply due to Trump’s more aggressive stance and because China needs an external enemy to quell unrest in its high-unemployment/real estate crisis economy...
Surprises: As for my prediction of surprises with a better-than-even chance of occurring between now and the end of the year:
- AI will stay in the cloud… I expect the ‘artificial’ in AI to remain artificial. Just consider the massive AI failures this year at Apple, Meta, and X…
- US will move strategy away from trying to slow China with sanctions…
- The Netherlands and, less-probably, Japan will break with the US and allow shipments of …to China…
- Low-capacity utilization and high inventories will come to be viewed as the norm…
- EV growth will continue to be slower than expected…
“Forecasting is difficult… Especially when it's about the future” — Yogi Berra
