AI demand pushes chip market toward $1.6 trillion

Gartner has raised its outlook for worldwide semiconductor revenue, now expecting the market to reach $1.6 trillion after forecasting $1.3 trillion just 4 months ago. Demand from AI deployments is pushing the sector into a new growth phase, with AI data centers set to account for more than 30% of revenue this year and 53% by 2030.

Memory is the main driver. Gartner expects memory revenue to reach almost $1.1 trillion in 2027, up from $837 billion this year, and said memory will account for more than 54% of industry revenue in 2026. NAND flash revenue is projected to rise 372%, while dynamic random-access memory is expected to increase 247%.

Excluding memory, semiconductor revenue is forecast to grow by nearly 22% in 2026, to $718 billion, and then expand to $864 billion next year. Gartner said hyperscalers will lift spending by more than 50% as they build AI infrastructure, increasing demand for GPUs, TPUs and other accelerators. Pricing pressure is expected to continue, with no “meaningful pricing relief” until late 2027.