Semiconductor revenue doubles as AI data center build-outs surge

Semiconductor revenue is set to almost double this year as the AI sector continues to reshape the market – and drive up prices for in-demand components.

New figures from Gartner project global semiconductor revenue growth to top 92% this year, reaching $1.6 trillion over last year's $809 trillion. In 2027, that’s expected to climb further to $1.9 trillion, the company said.

"The semiconductor industry is entering a fundamentally new phase of growth," said Ben Lee, Director Analyst at Gartner. "The pace of industry expansion is accelerating dramatically, driven by sustained investment in AI infrastructure and a stronger-than-anticipated memory pricing cycle."

That's good news for those manufacturing semiconductors, but the rise of AI – and the surge in demand that it's sparked for components – has led to price rises across a range of industries.

In the cloud market, a host of providers have issued price hike warnings. Meanwhile, consumer electronics are being hit hard by rising hardware costs. Apple recently warned that prices will rise this year, for example, while PC shipments have hit record lows.

Memory and beyond

Semiconductor gains are largely driven by memory revenue, with prices for the key component skyrocketing because of AI demand. Some predictions suggest that AI will consume a fifth of all DRAM capacity in 2026.

That shortage is sending prices skyrocketing and already impacting businesses' plans to upgrade tech.

This trend is expected to continue, according to Gartner. The firm predicted DRAM revenue would increase 246.6% this year, with NAND flash revenue up by 371.9% – and that’s despite additional capacity being made available.

Memory now makes up 54% of total semiconductor revenue, a huge leap from 27% last year. Revenue for memory will top $837bn this year and $1trn next year, Gartner predicts.

"AI infrastructure has fundamentally changed the dynamics of the memory market,” said Shrish Pant, Director Analyst at Gartner.

“While pricing expansion is accelerating growth in 2026, continued AI infrastructure deployments, higher memory content per AI server and sustained demand for high-bandwidth memory (HBM) will support memory revenue growth through 2027 and beyond."

While semiconductor revenue growth is dominated by memory price rises and demand, Gartner noted that the AI roll-out is benefiting all aspects of the industry, as AI data centers need CPUs, networking, power management, and more.

"AI is expanding the semiconductor opportunity across the entire infrastructure stack rather than benefiting a single device category," said Lee.

Gartner said semiconductor revenue growth excluding memory would grow from $589 billion in 2025 to $718 billion in 2026, an increase of 21.9% – and reach $864 billion in 2027.

AI data centers

Notably, the mass buildout of data centers is changing how semiconductors are used and where they end up, according to Gartner.

"As AI infrastructure scales, it is not only reshaping investment across the semiconductor ecosystem but also redefining the industry’s application mix," said Lee, saying Gartner sees a "a structural shift in where semiconductor value is created and how demand is evolving across the industry.”

Gartner predicted that the AI data center ecosystem would make up over a third (36.5%) of semiconductor revenue this year, climbing to more than half (53%) by 2030.

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