Global semiconductor sales jumped 27.0% to $59.0bn in May year-on-year, as the chip industry continues to bounce back from reduced demand in 2024. The data published today by the Semiconductor Industry Association shows sales also continued its upward month-on-month trend, rising 3.5% in May compared to April.

James Bull, technology industry senior analyst at RSM UK, commented: “Growth in the global semiconductor industry is continuing to recover from a slow 2024, and the latest data suggests it is shaking off the oversupply issues that plagued the industry last year. While the outlook for sales remains optimistic, there’s a risk this may be tempered by ongoing political and economic uncertainty in the second half of the year, particularly for exports between the US and China.

“Semiconductor sales continue to be boosted by AI demand, particularly in high-performance logic and memory chips. This is supported by forecasts of a c.20% increase in hyperscaler capital expenditure in 2025, which will continue to drive demand for advanced semiconductors.

“There was also a recovery in non-AI related cyclical semiconductor sales including PCs, mobiles and cars. This comes as manufacturers responded to overcapacity in the market during 2023 and 2024 by reducing production in Q4 2024 and Q1 2025, allowing them to pass on price increases of data storage products, which benefited sales in April and May.

“The semiconductor industry was valued at approximately $642bn in 2024 and is forecast to grow to $1tn by 2030, fuelled by continued global investment in AI chips and infrastructure. However, the UK accounts for a small fraction of this, with annual revenues estimated at around $9.8bn, reflecting just 1.5% of the overall market. The US and China continue to dominate the market, with no European suppliers featuring in the top 10 global semiconductor suppliers.

“Talent remains an issue for the UK’s competitiveness in the semiconductor industry. A recent study found 39% of the 27,245 in the UK’s semiconductor workforce are due to retire within the next 15 years. This, combined with a shortage of graduates entering the industry, poses a risk to the UK’s ability to compete and take advantage of the significant growth that is expected over the next five years.

“The government recently announced several initiatives in its Industrial Strategy, including a £35m skills programme, funding of up to £19m for a new semiconductor centre, £25m for two new innovation and knowledge centres, and £5m towards a new chip design enablement programme. This will go some way in addressing the current challenges faced by the UK’s semiconductor industry, but is a fraction of the commitments made by the US and EU. The investment is also focused on designing intellectual property and research and development, which will keep the UK front and centre in specialised areas, but means we will continue to rely on other countries for the manufacturing of chips.”