Global semiconductor revenue is projected to reach $1.6 trillion in 2026 — a 92% jump from $809 billion in 2025 — before climbing further to $1.9 trillion in 2027, according to a new report by technology research firm Gartner, Inc. The firm says the industry is entering a 'fundamentally new phase of growth,' powered by sustained AI infrastructure investment and a stronger-than-anticipated memory pricing cycle.

Memory Takes Centre Stage

Memory semiconductors are the single largest driver of this expansion. Memory revenue is forecast to total $837 billion in 2026 and cross the $1 trillion mark in 2027. According to Gartner, memory will account for 54% of total semiconductor revenue in 2026, a dramatic rise from just 27% in 2025.

Within memory, the growth figures are striking. DRAM revenue is expected to surge 246.6% in 2026, while NAND flash revenue is projected to expand by 371.9% — both driven by insatiable demand from AI data centres and high-bandwidth memory (HBM) requirements.

AI Infrastructure Reshaping the Semiconductor Ecosystem

Ben Lee, Director Analyst at Gartner, attributed the structural shift to the rapid scaling of AI workloads. 'Rising AI infrastructure is reshaping investment across the semiconductor ecosystem and redefining the industry's application mix,' Lee said. He added that the AI data centre ecosystem is expected to grow from 36.5% of semiconductor revenue in 2026 to more than 53% by 2030.

As AI clusters grow larger, faster, and more power-intensive, they are pulling in rising investment across CPUs, networking silicon, power management chips, analog devices, and optical interconnect technologies — broadening the semiconductor demand base well beyond memory alone.

Supply-Demand Balance Remains Tight

Despite additional capacity expected to enter the market in 2027, Gartner analysts project that supply-demand conditions will remain tight. Continued AI infrastructure deployments are forecast to keep memory consumption elevated, preventing any significant pricing correction.

Shrish Pant, Director Analyst at Gartner, noted that 'AI infrastructure has fundamentally changed the dynamics of the memory market.' Pant added 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.'

What This Means for the Broader Industry

The Gartner projections underscore a decisive pivot in where semiconductor value is being created — away from consumer electronics cycles and toward AI-driven enterprise and cloud infrastructure. This comes amid a global race among chipmakers to scale HBM and advanced packaging capacity, with players such as Samsung, SK Hynix, and Micron all ramping production to meet AI server demand. For India, which is actively courting semiconductor investments under its chip incentive programme, the trajectory signals a widening window of opportunity — provided domestic capacity can come online before the demand peak passes.