Semiconductor Industry: A Shift in 2025?

As we approach 2025, the semiconductor industry is poised for a significant shift, driven by several trends and factors. Let's explore the key dynamics at play and how investors can capitalize on these changes.

Growing Demand for AI and HPC

The global demand for AI and high-performance computing (HPC) is expected to rise by over 15% in 2025, fueled by upgrades in cloud data centers and specific industry segments (IDC, 2024). This growth presents an opportunity for investors to focus on companies specializing in AI and HPC chips, such as Nvidia, AMD, and Intel.



Expansion of Advanced Nodes and Packaging

The demand for advanced nodes (below 20nm) is accelerating due to AI, with TSMC and Samsung expanding their production capacities (IDC, 2024). Additionally, advanced packaging is growing even faster, with TSMC's CoWoS 2.5D packaging capacity expected to reach 90,000 wafers per month by the end of 2026 (Deloitte, 2025 Semiconductor Industry Outlook). Investors can consider companies like TSMC, UMC, and Amkor Technology, which are involved in advanced manufacturing and packaging.

Increased R&D Spending

The semiconductor industry's average spending on research and development has grown from 45% of earnings before interest and taxes (EBIT) in 2015 to an estimated 52% in 2024 (Deloitte, 2025 Semiconductor Industry Outlook). This trend indicates a focus on innovation and technological advancements. Investors can look for companies that are increasing their R&D spending and investing in cutting-edge technologies.

Geopolitical Shifts and Supply Chain Diversification

Geopolitical tensions are altering supply chains, with companies increasing geographic diversity to improve supply chain resiliency (KPMG and GSA, 2024). Investors can consider companies that are diversifying their supply chains and expanding into new regions, such as Southeast Asia, India, and the United States.

Emerging Technologies

The growing demand for AI and HPC is driving the development of new technologies, such as chiplets and advanced packaging. Investors can explore companies that are at the forefront of these emerging technologies and have the potential for significant growth.

In conclusion, the semiconductor industry is expected to experience a significant shift in 2025, driven by the growing demand for AI chips and advanced packaging, increased R&D spending, and geopolitical factors influencing supply chains. By staying informed about these trends and investing in companies that are well-positioned to capitalize on these changes, investors can position themselves for success in the dynamic semiconductor market.