We’re pleased to share the Future Horizons Semiconductor September update.
You can find the latest industry insights below:
Executive Summary
September’s WSTS Report saw July’s total semiconductor sales up 129.4 percent compared with July 2025, although this was down from the previous month’s record-breaking 144.2 percent growth.
The overall semiconductor market continues to record triple-digit annualised value growth rates. Around twice the level of the industry’s previous record highs of 59.3 percent in June 2000 and 66.6 percent in January 2010. Before that, cyclical peaks typically reached the 30–40 percent range.
What makes the current boom different is its concentration on a single, highly specialised end market: AI infrastructure. Growth is being driven primarily by average selling prices (ASPs), rather than unit demand, whereas previous semiconductor cycles have generally been broader-based and driven by increasing unit volumes.
Optimism around the market remains high, supported by expectations that AI will have a transformational impact on productivity, applications and the wider global economy. ICs have been the primary beneficiary, growing 151.4 percent compared with July 2025.
However, the wider semiconductor market presents a more measured picture. The high cost of AI-related chips makes them less applicable across many traditional semiconductor end markets, with non-AI segments growing at a considerably slower pace. Optoelectronics and Discretes, for example, grew by 8.4 percent and 13.5 percent respectively.
While Future Horizons does not question AI’s longer-term transformational potential or the opportunities it could create, it cautions that the current infrastructure-led boom may not be representative of eventual end-market demand.
Market Outlook
The semiconductor market remains in a period of exceptional growth, but Future Horizons continues to caution against assuming the current trajectory can be sustained indefinitely.
Unlike previous semiconductor upturns, which were typically driven by broad-based increases in unit demand, the current market is heavily dependent on AI infrastructure investment and the high ASPs associated with advanced ICs.
This creates a significant divide between the headline semiconductor growth figures and the performance of more traditional chip markets. While IC sales increased 151.4 percent year-on-year in July, Optoelectronics grew by just 8.4 percent and Discretes by 13.5 percent.
Future Horizons believes a market correction will eventually occur, although it acknowledges that it is impossible to determine precisely where the industry currently sits within the boom cycle or when a correction could take place.
The longer-term impact of AI is expected to be substantial, but the current emphasis on building infrastructure rather than supplying end products means today’s exceptionally high semiconductor growth rates may not provide a reliable indication of future demand.
For now, the market continues to deliver extraordinary headline growth. However, Future Horizons’ message remains one of caution: enjoy the strong market conditions but prepare for the possibility of an eventual adjustment.
