Gartner has raised its 2026 semiconductor forecast, with revenue now expected to jump 92%. Memory alone will account for more than half of industry growth.
The semiconductor industry is becoming a trillion-dollar growth engine as AI gobbles up more and more resources.
Gartner has slightly increased its forecast for worldwide semiconductor revenue since last quarter, now anticipating it to balloon by 92% over 2025. That would put the market at $1.6 trillion, compared to the firm’s $1.3 trillion prediction just 4 months ago.
Perhaps not surprisingly, AI data center revenue will account for a sizable share of the market, Gartner said, and the memory market will continue to grow by equally significant margins.
These findings represent the third consecutive year of double-digit growth in the industry, and illustrate the intense demand for AI compute, as more enterprises move from experimentation to full-on deployment.
“The semiconductor industry is entering a fundamentally new phase of growth,” Gartner director analyst Ben Lee noted in this quarter’s report.
Memory the main driver of industry growth
AI clusters are becoming larger and faster, and thus more power-intensive, requiring more CPUs, silicon, power sources, devices, and optical and interconnect technologies, Gartner pointed out.
Given this, semiconductor revenue is now expected to jump by about 135%, from $809 billion in 2025 to $1.6 trillion this year. And the market will only continue to grow at a rapid clip, reaching $1.9 trillion in 2027, the company predicted.
The new numbers are a modest increase over Gartner’s projections last quarter, but reflect the industry’s steady upward trend.
AI data centers’ chunk of that revenue will hit more than 30% this year, then increase to a notable 53% of market share by 2030, the firm forecasted. This underscores a “structural shift in where semiconductor value is created, and how demand is evolving across the industry,” Lee noted.
Memory revenue will keep pace, hitting almost $1.1 trillion in 2027, compared to $837 billion this year. Memory remains the primary contributor to industry growth, Gartner noted, accounting for more than 54% of revenue in 2026, double what it was last year.
The firm’s previous forecast expected memory revenue to increase by 3x amid “memflation,” which it called “profound, but not perennial.”
“Memflation will destroy, or at least delay, non-AI demand into 2028, to varying degrees depending on the application,” Gartner senior principal analyst Rajeev Rajput said in April. Gartner priced the DRAM and NAND market more modestly then, at the time predicting they would only increase by 125% and 234%, respectively.
Taking memory out of the equation, semiconductor revenue will grow by nearly 22% in 2026, to $718 billion, and expand to $864 billion next year. Those numbers are up from $589 billion in 2025, Gartner said, which represents a jump of more than 46%.
Equally dramatically, this year NAND flash revenue will increase by a whopping 372%, and dynamic random-access memory (DRAM) by 247%. Gartner noted that, while additional fabrication capacity will come online next year, supply-demand conditions will remain “tight” as AI deployments increase memory use.
Gartner director analyst Shrish Pant pointed out that continued AI infrastructure deployments, higher memory content per AI server, and sustained demand for high-bandwidth memory (HBM) will support memory revenue growth “through 2027 and beyond.”
Hyperscalers are projected to continue to increase their spending, this year by more than 50%, as they build out their AI infrastructure. This intensifies demand for accelerators, such as graphic processing units (GPUs), tensor processing units (TPUs), and other emerging technologies, Gartner said.
Likely to the dismay of many IT buyers, the firm said that there would be no “meaningful pricing relief” until late 2027. In fact, it expected higher prices in the first half of 2026, followed by “persistent but moderating price increases” through the remainder of the year.
Meanwhile, Rajput advised, CIOs and IT leaders should be “cautious about signing supply agreements with unfavorable pricing terms that extend beyond 2027.”
