chip sales surge: is this the new normal?
Washington, Monday, 5 May 2025.
Global semiconductor sales soared to $167.7 billion in the first quarter of 2025, marking an impressive 18.8% jump compared to the same period last year. The Americas led the charge, with sales up by roughly 45%. This surge reflects robust demand. Despite this growth, sales experienced a slight dip of 2.8% from the previous quarter. Key players like Nvidia, ASML, and TSMC are set to benefit.
Driving forces behind the surge
The Semiconductor Industry Association (SIA) reported that March 2025 sales reached $55.9 billion, a 1.8% increase from February’s $54.9 billion [1]. SIA represents a significant portion of the U.S. semiconductor industry and nearly two-thirds of non-U.S. chip firms [1]. SIA President and CEO John Neuffer noted that global semiconductor demand remains high, with first-quarter sales substantially outpacing last year’s [1]. He also highlighted that year-to-year sales have increased by over 17% for 11 consecutive months, primarily driven by a roughly 45% increase in the Americas [1].
Regional performance
Sales growth varied by region in March 2025 compared to the previous year [1]. The Americas saw a significant increase of 45.3%, followed by Asia Pacific/All Other (15.4%), China (7.6%), and Japan (5.8%) [1]. Europe experienced a decline of -2.0% [1]. Month-to-month sales in March 2025 showed increases in Europe (5.7%), Asia Pacific/All Other (3.6%), and China (2.4%), while the Americas (-0.4%) and Japan (-0.4%) saw decreases [1]. These regional variations highlight the complex dynamics influencing the global semiconductor market.
Nvidia’s Dominance and Market Share
Nvidia has emerged as the top semiconductor vendor, surpassing Intel and Samsung [2]. In 2024, Nvidia’s semiconductor revenue reached $76.692 billion, marking a 120.088 120.1% increase compared to $34.846 billion in 2023 [2]. This gives Nvidia an 11.7% market share [2]. Samsung Electronics followed with $65.697 billion in sales and a 10% market share, while Intel secured the third position with $49.804 billion [2]. SK Hynix saw substantial growth, with sales reaching $44.186 billion, a 91.472 91.5% increase [2].
China’s Growing Influence
China’s role in the semiconductor equipment market is expanding rapidly [3]. McKinsey reported that China’s share of global semiconductor equipment sales surged from 6% in 2010 to 38% in 2024 [3]. This growth is driven by the expansion of Chinese semiconductor companies, which saw annual growth of around 21% between 2010 and 2019 [3]. Despite a slowdown between 2019 and 2023 due to U.S. sanctions on Huawei, the Chinese semiconductor industry still grew by 9-10% [3]. China’s increasing importance in sectors like electric vehicles is further fueling its semiconductor ambitions [3].
Export restrictions and nvidia’s concerns
Nvidia’s CEO, Jensen Huang, has voiced concerns over U.S. export restrictions on AI chips to China [5]. These restrictions have led to the banning of Nvidia’s specialized chips like A800, H800, and H20 [5]. Huang estimates that Nvidia could face approximately $5.5 billion in losses related to H20 products due to these restrictions [5]. He also cautioned that China is developing into a significant technological competitor, with companies like Huawei designing their own AI chips [5]. Huang emphasized the need for policies that support domestic manufacturing capabilities [5].