Driven by AI demand consistently exceeding global supply capabilities, which is fueling robust growth in the DRAM and NAND markets, Omdia has revised its 2026 global semiconductor market revenue growth forecast upward to 94.1% year-on-year. Memory IC revenue is projected to account for over 50% of total global semiconductor revenue in 2026.

Concurrently, AI demand has surpassed the current chip manufacturing and packaging capacity of the semiconductor industry. Bottlenecks in critical areas such as High Bandwidth Memory (HBM), advanced packaging, and advanced process node capacity are expected to persist at least until 2027.

AI demand is intensifying pressure on HBM supply, while advanced packaging capacity remains tight. Due to the far more complex production process of HBM compared to traditional DRAM, only three manufacturers globally—SK Hynix, Samsung, and Micron (MU)—currently possess the capability for mass production, fundamentally limiting HBM supply. Furthermore, AI accelerator products from companies like NVIDIA (NVDA), Advanced Micro Devices (AMD), Intel (INTC), and Alphabet (GOOGL) all require HBM stacking technology, further elevating market demand.

Advanced packaging has also emerged as a major industry bottleneck. Dedicated production lines for advanced packaging at Taiwan Semiconductor Manufacturing (TSM) are currently operating at full capacity. However, due to long lead times for specialized equipment and capacity constraints among equipment suppliers like ASML and Tokyo Electron, it is difficult to rapidly expand advanced packaging capacity in the short term. Similarly, advanced process node capacity faces immense pressure. TSMC's 2nm and 3nm process capacity is largely booked by companies such as NVIDIA, AMD, Broadcom, and Apple, while the growth rate of AI model computing power demand far exceeds the pace of foundry capacity expansion.

Rising memory prices are pushing up costs across various end-user applications. As semiconductor industry revenue growth becomes increasingly concentrated in AI-related applications, other markets are facing significant cost pressures. Smartphones, PCs, and consumer electronics products are all affected by rising component costs, while automotive electronics and industrial electronics must also compete with the AI industry for advanced packaging and memory chip resources. In the memory sector, DRAM suppliers are prioritizing the supply of high-profit products like HBM, exacerbating price and delivery cycle fluctuations for general-purpose memory. In the packaging sector, traditional and mid-range products are relatively less affected, but products requiring 2.5D or 3D advanced packaging must compete with AI GPUs and other high-priority chips for limited packaging capacity. Similar trends are observed in advanced process nodes, where AI processors receive higher capacity priority, relegating PC and smartphone chips to a lower tier. Consequently, CPUs and System-on-Chips (SoCs) may face delivery delays, rising Average Selling Prices (ASPs), or may have to continue using older process nodes, thereby slowing performance improvements and energy efficiency gains.

Computing and data storage are expected to become the core driving forces for semiconductor market growth. Omdia forecasts that computing and data storage will be the fastest-growing application markets for semiconductor revenue in 2026, with market revenue projected to grow over 150% year-on-year, approaching a scale of USD 1 trillion. This growth will be primarily driven by sustained robust demand from data center servers and other high-storage-requirement applications, as well as rising memory chip prices. Consumer electronics and wireless communication applications are still expected to maintain strong semiconductor revenue growth momentum in 2026. Since the fourth quarter of 2025, smartphone prices have begun to rise and continue to climb, particularly for high-end models, which show more significant increases. Higher profit margins on premium products make it easier to absorb the cost pressures from rising memory prices. Meanwhile, this strategy is gradually narrowing the price gap between mid-range and high-end models, encouraging more consumers to upgrade to premium products. Later this year, Apple is expected to launch the iPhone 18 and iPhone Fold, while Alphabet is also set to release the Pixel 11 Pro Fold. These new products, with their innovative features and AI capabilities, will further increase the semiconductor content value per device. Additionally, products such as smartwatches, health and fitness wearables, game consoles, and OLED TVs are also expected to see significant semiconductor revenue growth, driven by rising component costs and sustained market demand.

Myson Robles-Bruce, Senior Principal Analyst at Omdia, stated, "From mid-2026 to early 2027, AI demand will continue to dominate the global semiconductor market. During this period, industry capacity will remain tight, advanced process nodes will maintain high utilization rates, and costs for memory and advanced packaging will continue to rise. Investments related to AI infrastructure will drive silicon chip demand to historic highs, while non-AI application markets will continue to be affected by supply constraints."