AI Boom to Power Chip Demand Surge by 2025, Predicts Daiwa

The recent analysis by Daiwa Securities suggests that the accelerating momentum of AI development is poised to substantially boost chip demand by 2025. As the world becomes increasingly reliant on AI technologies, the semiconductor sector is expected to see a significant surge in demand, driven by advancements in artificial intelligence and machine learning applications.

This prediction aligns with historical trends showing robust growth in the semiconductor industry. As of August 2024, global semiconductor sales reached a record $531.2 billion, marking a 20.6% increase year-over-year. Such figures support Daiwa's outlook that the upward trajectory will continue as industries across the globe integrate AI solutions.

Several global tech giants, including Apple, Huawei, and Meta, are regularly launching consumer electronic products with advanced AI capabilities, further fueling the necessity for more sophisticated chips. The ongoing iterative improvements in AI models, such as OpenAI’s latest series, demonstrate the persistent evolution and demands of AI technology, underlining the need for advanced semiconductor components.

Additionally, external factors like increased semiconductor export controls from major economies are propelling the transition towards domestic alternatives, contributing to the global semiconductor market's anticipated growth. These dynamics emphasize the importance of investing in areas such as chip design, advanced manufacturing, and AI infrastructure, which are expected to significantly shape the market landscape in the coming years.