Advanced artificial intelligence (AI) systems require vast computing power, and that demand is transforming the semiconductor industry. The surge in demand for memory chips and other components needed for AI has contributed to a global memory shortage and pushed up prices for electronic devices such as laptops, game consoles and smartphones.
There is also a financial flip side: manufacturers are reporting large revenues and rising profits as prices climb and demand remains strong.
TSMC projects a $1.5 trillion market by 2030
According to an analysis from Taiwan Semiconductor Manufacturing Company (TSMC) reported by Reuters, the global semiconductor market could reach more than $1.5 trillion by 2030. That is significantly higher than earlier estimates around $1 trillion.
TSMC attributes the growth primarily to demand from AI and other compute‑intensive fields. The company estimates that AI‑related demand could account for roughly 55 percent of a $1.5 trillion market, with smartphones representing about 20 percent and automotive applications about 10 percent.
Rapid demand growth and capacity expansion
TSMC expects demand for chips to grow to about 11 times the 2022 level. In response to rising demand, the company is building multiple new fabs around the world and reconfiguring existing capacity to increase output.
In the short term, these dynamics have led to supply shortages and higher prices; over the longer term, capacity expansions may add new supply to the market.
Why this matters
Chip shortages and price increases directly affect consumer electronics and the automotive industry and are accelerating manufacturers' investments in production capacity. TSMC's forecast suggests AI‑driven demand will be a dominant force in the industry over the next decade, with significant implications for global technology supply chains.
