The global semiconductor market in the second quarter of 2026 was $368 billion, according to WSTS. 2Q 2026 set records for growth: up 35% from 1Q 2026 and up a phenomenal 104% from 2Q 2025. The previous record growth was set in 1Q 2026: up 25% from the prior quarter and up 79% from a year earlier.
Growth continues to be driven by AI. Memory companies all reported extreme growth in 2Q 2026 from 1Q 2026 driven by AI applications, ranging from 51% at SK Hynix and Sandisk to 76% at Kioxia. Nvidia, the dominant supplier of AI processors, grew 18% in 2Q 2026 from 1Q 2026. Broadcom, another significant AI supplier, projected 33% growth in 2Q 2026 in its 1Q 2026 guidance. Collectively, the five AI suppliers in the table grew 40% in 2Q 2026 from 1Q 2026.
Two companies that are rising in the rankings are Kioxia at number eight and Sandisk at number nine. They have benefited from the strong AI demand for flash memory. Each company has more than quadrupled revenue from a year ago.
Excluding the major AI suppliers above, the combined revenues of the other top 20 semiconductor suppliers showed much more modest growth of 9% from 1Q 2026 to 2Q 2026. These companies’ revenues ranged from a 6% decline in Qualcomm’s IC business to a 19% increase at Intel. The combined guidance from these companies for 3Q 2026 is 6% growth from 2Q 2026.
The guidance for 3Q 2026 is for continued strong quarter-to-quarter growth, but at a more restrained pace. The three memory companies providing guidance (Micron, Kioxia and Sandisk) are projecting 3Q 2026 growth at less than half the rates of 2Q 2026. Of the twelve non-memory companies providing guidance, three (Qualcomm, Infineon Technologies and MediaTek) expect stronger growth in 3Q 2026, two (AMD and Onsemi) expect growth to remain the same, and seven project lower growth rates.
Recent forecasts for the full year 2026 semiconductor market growth all take into account the explosive growth in the first half of the year. Of the five latest forecasts, all call for an increase of 90% or more. The highest growth projections are 101% from us at Semiconductor Intelligence and 112% from RCD Advisors. Memory will continue to be the major growth driver, with 2026 growth projections of 249% from WSTS and 280% from Gartner.
Most of the recent forecasts for 2027 call for growth in the mid twenty-percent range. We at Semiconductor Intelligence are projecting 2027 semiconductor market growth of 50%. Even with decelerating growth over the next six quarters, the powerful growth in the first half of 2026 will drive healthy growth through 2027.
Our assumptions for 2027 are:
- Strong AI growth continues but at a less robust pace
- Automotive and industrial markets remain healthy
- Recovery in the PC and smartphone markets as memory shortages ease
We are living in unprecedented times for the semiconductor market. The current AI driven boom eclipses previous periods driven by consumer electronics in the 1970s, PCs in the 1980s, internet infrastructure in the 1990s, and smartphones in the 2010s. The timing is difficult to predict, but the current AI boom will eventually burst and then settle into more sustainable growth.