Semiconductor trends for 2025: Powering the future of AI

Advancements in semiconductors have fuelled the computing, communications and Internet eras in the past 40 years, and is now the engine behind the AI revolution. The global semiconductor industry went from $10 billion in 1980 to $100 billion in 1990, and $450 billion in 2020. 

The global semiconductor industry is now expected to grow to $1 trillion by 2030 (~100X from 1980) with AI-driven automotive, industrial and energy as the key drivers. The global economy will grow from $10 trillion in 1980 to $150 trillion in 2030 (~15x).

With the advent of Industry 5.0, electric vehicles, autonomous driving, smart grids, and industrial IoT, the demand for powerful, efficient, and secure semiconductors has never been greater. 

From revolutionizing automotive electronics to securing power infrastructure, semiconductors are not just components—they are the backbone of tomorrow’s AI driven digital economy, pushing innovation in ways that will redefine both consumer and industrial experiences.

Revolution in automotive electronics
Automotive industry is going through a seismic shift as vehicles change from mechanical systems with wheels to electronic systems with wheels. Software-defined vehicles require new high performance computing IC’s zonal controllers and smart peripherals that can all be updated and programmed over the air (OTA) bringing new capabilities to the market at a rapid pace. 

Semiconductors enable reliable and secure communications with the environment (V2X) to bring enhanced driver and passenger experience. Semiconductor sensors enable the vehicle to understand its environment, its users and its own behaviour in real-time. Semiconductor processors enable self-learning algorithms with real-time decision making for smooth autonomous driving. Semiconductor power and motor control IC’s are the engine behind high efficiency electric vehicles.  

Rise of smart grids in energy sector
Global push for decarbonization, broad adoption of electric vehicles, combined with the rapid growth of India are driving an unprecedented growth in renewable energy generation. The grids are being upgraded to handle the distributed energy generation. 

Smart grids that can balance the demand response and loads using AI need a new generation of semiconductor processors and broader deployment of sensors at every point of generation, transmission and consumption. Advanced semiconductor materials like SiC and GaN, combined with advancements in Si IGBT technologies, are providing higher efficiency in AC-DC and Dc-DC conversions. This is reducing losses in the grid. 

Solid-state storage and switching are reducing the size and improving the conversion efficiencies. As the grid gets digitized, secure semiconductors are needed to achieve resiliency against cyber-attacks.

Advancements in connected industrial and consumer devices
Similar trends in software defined architecture are occurring in all industrial areas. Industry 4.0/5.0 requires processors, security IC’s and semiconductors that support efficient motor control. 

AI analysis of large amounts of data from machines, environment, security cameras and processes need advanced HPC IC’s as well as a broad range of new sensors and actuators. These semiconductors are driving higher productivity, reducing energy use, and enabling new processes.

-- Sandeep Kumar, CEO, L&T Semiconductor Technologies Ltd.