The 2026 semiconductor forecast has been revised sharply upward to 62.7%, reflecting sustained momentum in memory markets driven by artificial intelligence applications. According to Omdia, the industry is entering an unprecedented growth phase, supported by constrained supply and elevated pricing dynamics.
Notably, both DRAM and NAND segments are expected to outperform prior projections. While DRAM revenues are set to nearly double, NAND could expand at an even faster pace, potentially quadrupling compared to 2025 levels. Therefore, memory components will remain the primary driver of sector-wide revenue expansion.
AI Demand Intensifies Memory Supply Constraints
Supply limitations in conventional memory integrated circuits continue to tighten. This pressure stems from the industry’s increasing allocation of capacity toward High Bandwidth Memory (HBM), which offers higher margins but lower output volumes.
Consequently, the shift toward HBM production reduces the availability of standard memory products. At the same time, enterprise and hyperscale data centre demand remains robust. As a result, meaningful supply relief is unlikely before late 2027.
Enterprise Investment and Server Refresh Cycle Boost Growth
In 2026, enterprises are expected to undertake a significant server refresh cycle. This transition aligns with elevated capital expenditure by hyperscalers seeking to support advanced AI workloads.
Moreover, organisations are accelerating the retirement of legacy infrastructure. This shift enables the deployment of high-performance systems built on next-generation semiconductors and enhanced connectivity solutions.
As a result, average selling prices (ASPs) are expected to rise further. The combination of strong demand and limited supply continues to reinforce pricing power across the semiconductor value chain.
Computing Segment Leads Revenue Expansion
Computing and storage applications will dominate growth within the 2026 semiconductor forecast, with revenues projected to increase by 90% year-on-year. This surge is expected to push the segment beyond $700 billion in total value.
Importantly, this growth is largely attributed to data centre expansion and memory-intensive workloads. Elevated pricing for memory ICs further amplifies revenue gains, despite moderate increases in shipment volumes.
Consumer Electronics Maintain Positive Outlook
Although smartphone unit growth is expected to remain relatively stable, semiconductor revenues within the segment will rise. This increase is primarily driven by higher memory costs, which significantly elevate overall bill of materials (BOM) values.
Additionally, the market will benefit from multiple flagship device launches. These include foldable smartphones and AI-enhanced models offering advanced features such as computational photography.
Meanwhile, wearable technology—including smartwatches and wellness devices—will also contribute meaningfully to revenue growth. Therefore, consumer electronics remain an important secondary growth pillar.
Outlook: Sustainability of AI-Led Growth in Question
Despite strong near-term performance, uncertainties persist regarding the long-term sustainability of AI-driven investment. According to industry analysts, the rapid expansion of AI infrastructure raises questions about return on investment.
Furthermore, macroeconomic challenges—including tariffs, energy costs, and geopolitical tensions—could introduce volatility. It is also notable that current revenue growth is largely price-driven rather than volume-led.
Historically, similar patterns have emerged during previous memory cycles, such as those linked to cryptocurrency mining. However, the current cycle is broader in scope and scale.
Therefore, while the 2026 semiconductor forecast remains highly optimistic, market participants will closely monitor supply expansion and demand durability over the coming quarters.
