Global semiconductor sales rise despite AI investment sentiment cooling
Global semiconductor sales rose 20.6% to $62.1bn in August compared with the same month last year, according to the Semiconductor Industry Association. Month-on-month, sales increased 3.6%, reflecting ongoing recovery in the market.
James Bull, technology industry senior analyst at RSM UK, said: “Many businesses are still struggling to extract meaningful value from AI, and this has led to a more cautious mood in financial markets over the summer. There has been a muted response to Chat GPT5, and recent MIT research showed that, while 80% of organisations have explored or piloted GenAI tools, 95% of enterprise AI pilots fail to deliver a measurable return. The findings have served to cool some of the built up hype in the markets and have sharpened investor focus on results.
“However, despite the recent caution on AI, capital expenditure for Alphabet, Amazon, Microsoft and Meta (the hyperscalers) is still expected to rise by around 20% in 2025 to c.$350bn, and to approach $400bn in 2026. This highlights the continuing strength of underlying demand for advanced semiconductors powering AI datacentres, and compares to c.$100bn in 2020, prior to the launch of the mainstream generative AI models.
“The cost of AI use is falling rapidly, with data from Epoch AI showing that inference prices - the cost of using a trained generative AI model - are declining around tenfold every year, however the increasingly complicated workloads of advanced reasoning models launched over the last year are offsetting these efficiency gains. As a result, this continues to fuel the expansion of global data centres and the sustained demand for advanced AI semiconductors. We are also seeing knock-on effects of higher costs in the software industry, where more firms are adopting hybrid pricing models to absorb the higher costs of embedding AI into workflows.
“While the UK isn’t competing with the scale of US investments, UK investment in AI data centres is growing fast, with nearly 100 new sites planned and a 6 gigawatt capacity target for 2030 set out in the UK Compute Roadmap, which will continue to fuel the demand for advanced semiconductors.”