TOKYO (Jan 5): The global chip market is projected to grow 11.2% to a record US$697.18 billion (RM3.13 trillion) in 2025, boosted by robust demand for semiconductors for use in artificial intelligence (AI)-powered smartphones and data centres, according to an industry organisation forecast.

Kyodo News Agency reported that the forecast was revised up from a June estimate of US$687.38 billion, the World Semiconductor Trade Statistics, an organisation formed by major chipmakers, said.

The increasing use of AI technology across countries and industries has sparked a demand surge for chips, as tech companies globally rush to secure enough supply for data centres that support the development of generative AI and devices utilising the AI technology.

By product, demand for logic semiconductors, which function as the brains of electronic devices, is expected to increase 16.8% to US$243.78 billion, while that of memory chips, which store data, is forecast to rise 13.4% to US$189.41 billion, the organisation said in its latest outlook released in early December.

The markets for other types of semiconductors such as analog chips are also expected to expand, as long as the global economy grows at least moderately, according to the report.

By region, the Americas are forecast to log the biggest growth with a 15.4% increase to US$215.31 billion, followed by the Asia-Pacific region with 10.4% growth to US$376.27 billion.

Europe is expected to see the smallest growth of 3.3% to US$53.74 billion. The Japanese market is projected to expand 9.4% to US$51.87 billion, according to the forecast.

The global chip market in 2024 is estimated at US$626.87 billion, up 19.0%, the organisation said, as growth in AI-related chips covered sluggish demand for those used for cars and industrial equipment.

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