Worldwide semiconductor revenue is expected to exceed $1.3 trillion in 2026, marking the strongest growth the industry has seen in more than two decades, according to new forecasts from Gartner.
The research firm said the surge will be driven primarily by sustained demand for artificial intelligence (AI) processing, data centre networking and power technologies, alongside sharp increases in memory prices. Gartner expects overall semiconductor revenue to grow by 64% in 2026, extending the sector’s run to a third consecutive year of double‑digit growth.
“Amid high demand for AI processing, data centre networking and power, and memory price inflation, the semiconductor industry is projected to achieve a third consecutive year of double‑digit growth in 2026 – a milestone that underscores the sector’s pivotal role in the AI technology stack,” said Rajeev Rajput, senior principal analyst at Gartner.
A central feature of the forecast is so‑called “memflation”, with memory revenues expected to triple in 2026. Gartner estimates that average annual prices for DRAM and NAND flash will rise by 125% and 234% respectively during the year. While analysts describe the scale of the price rises as substantial, they do not expect the effect to be permanent, with meaningful pricing relief unlikely before late 2027.
“Memflation will destroy, or at least delay, non‑AI demand into 2028, to varying degrees depending on the application,” Rajput said.
AI-related semiconductors are expected to account for around 30% of total global semiconductor revenue in 2026, reinforcing their role as the industry’s primary growth engine. Continued investment by hyperscale cloud providers is a major contributor, with spending on AI infrastructure build‑outs forecast to increase by more than 50% in 2026. This is expected to sustain strong demand for AI accelerators, including graphics processing units (GPUs) and custom-designed chips.
Gartner also warned that rising memory costs could put pressure on technology buyers during the year. Rajput said suppliers are likely to face higher prices in the first half of 2026, followed by continued but more moderate increases later in the year.
“Technology suppliers should prepare for higher prices during the first half of 2026, followed by persistent but moderating price increases throughout the rest of the year,” he said. “CIOs and IT leaders should be cautious about signing supply agreements with unfavourable pricing terms that extend beyond 2027.”
The forecast highlights the growing influence of AI on the semiconductor market, while also pointing to challenges for non‑AI applications as elevated memory prices ripple through the wider technology sector over the next several years.
