Gartner forecasts 64% revenue growth for the sector by 2026, driven by AI demand and edge device expansion.
The PHLX Semiconductor Sector index has climbed 157% over the past year, reflecting robust demand for chips powering AI and edge devices. Semiconductor revenue is projected to reach $1.32 trillion in 2026, a 64% increase, before surpassing $1.55 trillion in 2027, according to industry forecasts.
The surge is attributed to AI model training and deployment, as well as growing chip usage in smartphones, PCs, vehicles, and other edge devices. Prior growth was fueled by pandemic-driven demand, but AI adoption has accelerated revenue expectations for the sector.
Taiwan Semiconductor Manufacturing (TSM), the world’s largest foundry, remains a key beneficiary of this trend, producing chips for fabless designers and capitalizing on secular industry growth.