Semiconductor sales forecast to reach $1 trillion by 2027: Bank of America

Semiconductor sales are projected to reach $1 trillion by 2027, up from Bank of America's prior estimate of $860 billion. This growth is driven by surging demand related to artificial intelligence. Bank of America has flagged higher growth in memory products such as HBM, commodity DRAM, and NAND.

Semiconductor sales are projected to reach $1 trillion by 2027, according to a recent report from Bank of America. This substantial growth is primarily driven by surging demand related to artificial intelligence (AI), which is expected to significantly boost the market for memory products such as high-bandwidth memory (HBM), commodity DRAM, and NAND flash, according to a Seeking Alpha article.

The analysts at Bank of America have revised their prior estimate of $860 billion for 2027, noting that the current AI infrastructure build-out is structurally more durable than previous large cycles. They foresee industry sales of $745 billion in 2025, $870 billion in 2026, and $971 billion in 2027. Excluding memory, sales are expected to be around $538 billion, $621 billion, and $706 billion, respectively, the article says.

The report highlights that memory products, particularly those used in data centers and AI-related components, are expected to see significant growth. The analysts attribute this to the increasing demand for more powerful and efficient computing systems to support advanced AI models. Additionally, semiconductor equipment spending is projected to reach $118 billion in 2025, $128 billion in 2026, and $138 billion in 2027, the article notes.

The report also notes that the semiconductor industry is experiencing a period of sustainable growth, with capital intensity expected to settle in the range of 14-17%, which is 100-400 basis points above the historical average. This growth is driven by the increasing complexity of semiconductor manufacturing and the broader cyclical recovery in the data center and AI markets, the article adds.

The semiconductor sector is poised for significant growth over the next few years, driven by the continued expansion of AI capabilities and the increasing demand for advanced computing systems. Investors and financial professionals should closely monitor this sector for potential investment opportunities, the article suggests.