semiconductor industry — The semiconductor industry is on track to exceed $1 trillion this year, driven by a remarkable surge in revenue. In the first quarter of 2026, semiconductor revenue soared by 27 per cent, totalling $319 billion, as reported by Omdia. This exceptional growth marks the highest quarterly increase since the firm began monitoring the sector in 2002.
Semiconductor industry: Memory Market Fuels Growth
The memory market has emerged as the primary driver of this substantial growth, with revenues climbing over 80 per cent sequentially from the final quarter of 2025 to the first quarter of 2026. Market analysts predict that if this trend continues, total semiconductor revenue could surpass $700 billion during the first half of 2026.
Artificial Intelligence Demand
The sustained demand for artificial intelligence technologies plays a significant role in this momentum, alongside persistent supply and demand imbalances within the memory sector. Revenue for dynamic random-access memory (DRAM) and NAND flash memory nearly doubled within a single quarter, with these components accounting for more than 40 per cent of all semiconductor revenue in early 2026, a figure significantly higher than the long-term average of 20 per cent.
NAND Sector’s Prominent Role
The NAND sector was particularly influential, with revenue reaching nearly $48 billion following a staggering 96 per cent sequential increase. Average selling prices for NAND rose by 95 per cent, propelled by strong demand from data centres and ongoing supply limitations.
Future Market Projections
Market momentum is expected to persist through the second quarter of 2026, although supply recovery remains hampered by product mix challenges, yield learning, and technology transitions. While the memory sector has shown remarkable deviations from historical trends, the overall semiconductor market has demonstrated more stable performance. Excluding memory integrated circuit revenue, the wider market exhibited modest gains of just over 2 per cent.
Seasonal Trends and Outperforming Sectors
Historically, both the overall market and the non-memory segment tend to decline by around 4 per cent during the first quarter of each year. However, components linked to the AI and data centre ecosystem have outperformed these seasonal expectations, demonstrating resilience and growth.
Continued Growth Expected
Growth is projected to continue throughout the second quarter of 2026, with the memory sector once again anticipated to lead the charge. Although the rate of expansion is expected to be lower than the previous quarter, it remains robust enough to generate more than 20 per cent sequential growth for the industry.
“Four consecutive quarters of double-digit revenue growth for the market show the strength of the current demand for semiconductors,” stated Clifford Leimbach, Practice Leader at Omdia. “This expected growth would bring the first half of 2026 to over $700 billion, well on track to surpass the $1 trillion threshold this year.”
