The Chip Insider® – The Chip Insider's Strategic Forecast for 2026

The Chip Insider’s Strategic Forecast for 2026: Now that 2025 is over, it’s clear that last year the forecasters were not optimistic enough for the second year in a row: IC sales at $737B for the year are close to being up year-over-year by 26% at this writing, Contrast that with TechInsights’ forecast of a 23% rise a year ago. We were on the high end…

The Chip Insider’s Predictions and Surprises from Last Year: This includes predictions of surprises with a better-than-even chance of occurring before the end of the year: Macroeconomic: The US economy stayed amazingly strong … Geopolitical: As predicted, tensions did rise to red-hot in 2025… Surprises: As for last year’s predictions of surprises with a better-than-even chance of occurring between now and the end of 2025: AI will stay in the cloud… Correct… US will move strategy away from trying to slow China with sanctions… Correct... The Netherlands and, less probably, Japan will break with the US and allow shipments of … to China… Not correct… Low-capacity utilization and high inventories will come to be viewed as the norm… Mixed … EV growth will continue to be slower than expected… Correct… So, that’s 3 out of 5 predictions of surprises that came through in 2025, while 1 out of 5 was mixed. Now let’s look at 2026.

The Chip Insider’s Predictions and Surprises for 2026: This includes predictions of surprises with a better-than-even chance of occurring before the end of the year: TechInsights expects IC sales to grow 28% in 2026 … We expect chip equipment to grow 11%, with test and assembly outpacing WFE due to… Macroeconomic: The US economy will remain strong in 2026, as fiscal deficits and dovish monetary policies will drive growth… Geopolitical: Tensions will continue to be red hot this year … 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…
• Inference AI will populate not at the edge, but instead at the corporate services and productivity level…
• Fears of a memory glut will not manifest in 2026…
• China’s working “EUV lithography tool” will prove to be no more than … a light bulb.
• A weaker dollar will favor American-made semiconductor and chipmaking equipment.
• Predictions of the semiconductor market hitting the $1T in 2026 will be proven to be a year too late…
• Weird rules, not norms when it comes to economic and national security policies…