That’s an upgrade from their earlier forecast of 15.5 per cent growth, and it’s down to the AI gold rush. Data centre chips are pulling in cash hand over fist, dragging automotive and industrial markets out of their post-pandemic slump.

For the first time, a single semiconductor outfit is on track to smash through $200 billion in annual revenue, a figure that underlines just how dominant the AI-driven buildout has become. IDC says compute chips alone will surge 36 per cent to $349 billion this year, with a five-year compound annual growth rate of 12 per cent.

Networking is cashing in. IDC notes demand for high-capacity ethernet switches, SmartNICs and DPUs as hyperscalers scramble to fix bottlenecks in data movement rather than raw compute. Optical interconnects are in the mix too, as cloud providers and telcos rip out old kit to cope with AI workloads.

Automotive silicon is crawling back after two years in the doldrums, with suppliers reporting sequential growth thanks to inventory normalisation in China.

IDC warns that expiring subsidies, customer destocking and trade spats could make life difficult. Industrial semiconductors are also rebounding, with military, aerospace, manufacturing and edge AI driving demand.

Smartphones are seeing higher semiconductor content per device, with NPUs and GPUs sneaking in to support on-device AI. IDC reckons wireless chips will grow by five per cent in 2025, though tariffs and trade rows could distort things in 2026.

IDC research director Nina Turner said: “2025 continues the strong growth from 2024, but markets that declined in 2024 such as automotive and industries are only now starting to recover.”

IDC group vice president Mario Morales said: “The semiconductor industry is entering a new era of growth, fuelled by the datacentre buildout to support AI workloads. IDC forecasts that the semiconductor market will become a trillion-dollar market by 2028; almost two years faster than consensus.”