Global Chip Industry Poised For Explosive Growth As Ai And Geopolitics Take Center Stage

KPMG’s Global Semiconductor Outlook survey reveals that 92% of executives foresee overall industry expansion in 2025, driven by the insatiable demand for AI-powered chips. The report paints a vibrant picture of optimism and growth, with significant revenue growth predictions.

The findings are attributed largely to the booming demand for chips in AI-driven applications, cloud computing, data centers, wireless communications, and automotive sectors. Over one-third of executives predict increases of at least 10% in revenue, with the KPMG Semiconductor Industry Confidence Index rising to 59, signaling increased optimism among executives.

However, amidst this optimism, executives acknowledge significant challenges that lie ahead. Geopolitical tensions, including tariffs and trade restrictions, pose a substantial threat to supply chain resilience. The ongoing talent crisis within the industry is another pressing concern, with companies recognizing the need to strengthen their workforce development strategies to remain competitive.

To navigate these complex dynamics, semiconductor leaders are increasingly focusing on geographic diversification, improving supply chain adaptability, and enhancing talent retention. Tech giants and established players are vying for market share, with AI-driven innovations playing a pivotal role in this competition.

The emergence of new competitors has become an equally significant concern, as executives recognize the need to stay ahead of the curve in terms of technological advancements and strategic investments. Lincoln Clark, KPMG global semiconductor leader, notes that “significant investments and cutting-edge strategies will be essential for companies to not only survive but thrive in this rapidly evolving landscape.”

The report’s findings also underscore the critical role of AI enablers, such as high bandwidth memory, which are projected to have a substantial impact on the industry over the next three years. Microprocessors, including graphics processing units (GPUs) used for AI, are seen as the leading product opportunity for industry growth, ahead of memory and sensors/MEMs.

As the semiconductor industry embarks on this exciting journey, significant investments and cutting-edge strategies will be essential for companies to navigate these challenges with renewed confidence and strategic foresight.