Semiconductor Industry Enters Unprecedented Giga Cycle Amid AI Demand

The semiconductor industry is poised for unprecedented growth driven by the demand for artificial intelligence, leading to what analysts are calling a 'giga cycle.' According to a report by Creative Strategies, global semiconductor revenue, which was approximately $650 billion in 2024, is projected to exceed a trillion dollars by 2028 or 2029, primarily due to an expansive AI infrastructure buildout.

AMD CEO Lisa Su has highlighted the AI hardware market as a trillion-dollar opportunity by 2030, with expected compound annual growth of 35% for AMD overall and around 60% for its data-center segment. Meanwhile, Nvidia has outlined an even larger AI infrastructure opportunity, estimating it could range from $3 trillion to $4 trillion over the next five years.

This growth is not limited to a single segment; every category of silicon is forecast to expand, with data-processing silicon projected to represent over half of total semiconductor revenue by 2026. The AI server market alone is expected to grow from around $140 billion in 2024 to as much as $850 billion by 2030.

Furthermore, Broadcom anticipates its custom-silicon business will surpass $100 billion by the end of the decade, and it has already secured a $10 billion AI infrastructure order, likely from OpenAI. The demand for advanced high-bandwidth memory (HBM) is also expected to surge, with revenue projected to increase from $16 billion in 2024 to more than $100 billion by 2030.

The defining characteristic of this giga cycle is the simultaneous growth across all segments of the semiconductor value chain, reshaping the landscape of the industry.