Artificial Intelligence Surge To Propel Global Chip Market Past $1.3 Trillion In 2026

The global semiconductor industry is expected to experience significant growth, with revenue projected to surpass $1.3 trillion in 2026, according to findings released by Gartner. This reflects one of the most rapid growth phases in recent decades.

The report suggests that the sector may expand by 64 per cent in 2026. This growth is being supported by increased demand for artificial intelligence computing, the expansion of data centres, and escalating memory component prices.

“Amid high demand for AI processing, data centre networking and power, and memory price inflation, the semiconductor industry is projected to achieve a third consecutive year of double-digit growth in 2026,” said Rajeev Rajput, Senior Principal Analyst at Gartner.

The analysis forecasts that semiconductor revenue will rise from $805.3 billion in 2025 to $1,320.2 billion in 2026. The upward trend is expected to continue further, reaching approximately $1,554.5 billion by 2027.

Memory Segment to Record Sharp Increase

The memory chip segment is projected to witness significant growth. Its revenue is expected to rise sharply from $216.3 billion in 2025 to $633.3 billion in 2026. This increase is primarily attributed to rising prices in the memory market.

According to the report, Dynamic Random Access Memory (DRAM) prices could increase by 125 per cent, while NAND flash prices are expected to climb by around 234 per cent in 2026. Any meaningful price correction is unlikely before the latter part of 2027.

Semiconductors designed for artificial intelligence are expected to play a major role in the market.

They are projected to account for nearly 30 per cent of the industry’s total revenue in 2026. Increased spending by hyperscale companies on AI infrastructure is expected to drive demand for GPUs and specialised chips.

Investment in AI infrastructure is projected to grow by over 50 per cent, reinforcing market demand. However, the report warns that higher memory prices could dampen demand in non-AI sectors until 2028.

“Technology suppliers should prepare for higher prices in the first half of 2026, followed by moderating increases through the rest of the year,” Rajeev Rajput noted, advising IT decision-makers to carefully assess long-term supply contracts.

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