Semiconductor industry faces mixed outlook in 2025 amid AI growth and tariff threats, reports SEMI and TechInsights

The global semiconductor manufacturing industry entered 2025 with typical seasonal trends, but tariff threats and shifting supply chain strategies are expected to create a typical seasonality in several segments, according to the Q1 2025 Semiconductor Manufacturing Monitor (SMM) Report by SEMI and TechInsights, released on May 19, 2025.
In Q1 2025, electronics sales fell 16% quarter-over-quarter (QoQ) and remained unchanged year-over-year (YoY), aligning with seasonal patterns. Integrated circuit (IC) sales declined 2% QoQ but grew 23% YoY, driven by investments in AI and high-performance computing infrastructure. The report notes that newly announced tariffs have not yet directly impacted electronics and IC sales.
Clark Tseng, Senior Director of Market Intelligence at SEMI, stated that trade policy uncertainty is causing some companies to accelerate shipments while others delay investments. This dynamic may lead to irregular seasonal patterns throughout 2025 as the industry adjusts to evolving supply chain and tariff conditions.
Semiconductor capital expenditures (CapEx) dropped 7% QoQ but increased 27% YoY, with manufacturers focusing on leading-edge logic, high-bandwidth memory (HBM), and advanced packaging for AI applications. Memory-related CapEx rose 57% YoY, while non-memory CapEx grew 15% YoY in Q1 2025.
Wafer fab equipment (WFE) spending increased 19% Yo...