Market Insight Momentum in the chip market
“Without continual growth and progress, such words as improvement, achievement and success have no meaning,” said Founding Father Benjamin Franklin. In 2025, this sentiment applies to the semiconductor industry, where sustained demand, expanding capacity and technological prowess are driving progress. Here, Ross Turnbull, director of business development at application-specific integrated circuit (ASIC) specialist Swindon Silicon Systems, reflects on this year’s semiconductor market growth as we look forward to 2026.
D
rawing on the perspective of 156 senior executives and published at the beginning of this year, KPMG and GSA’s Global Semiconductor Industry
Outlook assessed that after recovering from the challenges of a few years ago, the semiconductor industry “is poised for significant growth again in 2025.” (1) Looking back on the year, the data supports this prediction.
The Semiconductor Industry Association reported that early 2025 global sales consistently outpaced 2024, with January alone rising nearly 18 per cent year-on-year. This growth has continued with the latest report announcing, “global semiconductor sales were 208.4 billion dollars during the third quarter of 2025, an increase of 15.8% compared to Q2.” (2)
While the numbers show the market has steadily grown this year, the real story lies in the forces shaping that growth.
16 December/January 2026
Driving growth
This year has seen significant private and public investment, as well as renewed interest in semiconductor design, fabrication and research.
In October 2025, GlobalFoundries announced a €1 billion expansion of its Dresden fab, aiming to produce over one million wafers per year by 2028. At policy level, the European governments are calling for an ambitious follow-up to the European Chips Act, originally released in 2023. The “Chips Act 2.0” (3)
Industrial Strategy for Advanced Manufacturing, (4)
announced in June 2025,
recognised semiconductors as essential to the UK’s goal to become a global leader in advanced manufacturing by 2035, committing £2.6 billion to semiconductor research and development.
The rationale behind these investments is clear: semiconductors are fundamental to the next wave of technological transformation.
seeks to strengthen
Europe’s global position amid increased competition from China and the US. Some of the proposed measures include mobilising €200 billion for semiconductor investment by 2035, cutting project approval times to under seven months and establishing a central EU semiconductor budget line of at least €20 billion under the European Competitiveness Fund to ensure coordination and critical mass. Meanwhile, in the UK, the Modern
Components in Electronics
AI continues to fuel unprecedented demand for high-performance chips, as they power everything from data centres to generative AI applications. As manufacturers progress toward continuous, highly autonomous production — or “lights-out” operation —factories increasingly depend on advanced semiconductor solutions to connect machines, sensors or systems to power automation. The automotive sector is also a major driver of semiconductor demand,
as electric and autonomous vehicles rely on advanced chips for power management, sensor networks and in-vehicle computing systems.
Custom solutions
To support the diverse demands of AI, automotive and industrial automation, the semiconductor industry relies on a broad spectrum of solutions.
General-purpose processors and memory chips continue to drive much of the market’s volume, providing flexible performance across multiple applications. However, specialised solutions are enabling manufacturers to meet specific technical requirements, delivering higher efficiency, faster processing and improved reliability in targeted applications. Among these specialised devices, ASICs occupy a unique position. Engineered for defined functions, their architectures can be configured to accommodate dedicated data paths, specialised logic or custom interfaces.
www.cieonline.co.uk
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