Semiconductor market pulse: Five insights for Q4 2025
The latest insights on market trends, technological advancements, and supply chain shifts shaping Q4 2025.
Avnet Silica’s latest Trendliner Q4 2025 report confirms that the semiconductor industry continues to stabilise following a period of volatility, with clear signs of improving market conditions. The report provides a data-driven snapshot of market direction, highlighting areas of growth and key trends in technology and supply chain management. Here, we summarise the five key findings for design engineers seeking clarity on the outlook for the months ahead.
1. Market stabilisation continues
The semiconductor market stabilisation observed in Q3’s Trendliner broadly continues in Q4, as the benefits from recent local investments and supportive funding programmes continue to feed through. For most standard components, lead times and supply chain conditions have improved
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2. Growth factors remain positive, but still uneven
Overall growth projections for the global semiconductor market remain positive, although slightly lower than Q3 forecasts. The 2025 forecast is more bullish at 5.8% growth, while projections through 2028 are slightly down, with the 3-year CAGR dropping from $83 billion (Q3) to $51.4 billion (Q4). The total market size (excluding DRAM, Flash, and high-end processors) is now predicted to be $373 billion in 2025, reaching $424 billion by 2028.
Asia continues to dominate with 65% market share, while the Americas and EMEA show signs of gradual recovery from recent declines. Momentum in the EMEA region, however, remains fragile, with the Eurozone PMI dropping from 50.7 to 49.8, reflecting a dip in business confidence and more cautious purchasing activities. As observed in Q3, the mid-sized economies, such as the Netherlands and Spain, continue to expand, while larger economies remain in contraction.
On the macroeconomic front, no major changes are expected. Global inflation is easing, and the IMF expects interest rates to undergo only moderate cuts from mid-2026.
3. AI is the leading driver of growth
Q4 continues to see the dominance of Artificial Intelligence (AI), the current growth engine of the semiconductor industry. The hunger for more intelligence at the edge is driving demand for more powerful and energy-efficient hardware, capable of hosting AI and ML routines for a wide spectrum of IoT applications, as well as increasingly autonomous automobiles. The increasing deployment of AI in the cloud is fueling demand for powerful servers and energy-efficient power delivery infrastructure. Finally, the global 5G rollout continues to leverage AI, requiring powerful hardware across the network.
4. Automotive continues to lead EMEA's market growth
The Automotive sector remains the largest vertical in EMEA, accounting for an estimated 46% of the total market in 2025. High-performance computing (HPC), advanced driver-assistance systems (ADAS) and electrified powertrains continue to be the primary growth drivers and are forecast to add over $3 billion by 2028, representing a CAGR of 9.8%. The industrial (25%), communications (14%), and data processing (11%) sectors also contribute significantly to EMEA’s overall performance, with agricultural technology, PCs, servers, and smartphones continuing to experience strong growth.
5. Supply chain risks remain, especially for memory and MCUs
The supply chain continues to reflect the trends reported in the third quarter. Although lead times for many products have returned to previous levels, stronger growth in AI and the automotive sector is driving extended lead times and price volatility for certain components. As in Q3, memory products remain the most impacted, especially NAND, DRAM, eMMC and SRAM, alongside automotive microcontrollers (MCUs), digital signal processors (DSPs), and standard logic devices. End-of-life (EOL) notices also continue to be announced ahead of year-end. Developers seeking to capitalise on the opportunities in fast-growing markets such as AI and automotive need to factor in these supply chain risks when planning development timelines and production schedules.
Conclusion: Opportunities on the horizon, despite volatility
While volatility persists in high-demand segments such as AI, automotive, PCs, servers, and smartphones, longer-term prospects for the semiconductor market continue to improve. The insights in this quarterly report help engineers and supply chain professionals leverage Avnet Silica’s market intelligence, built on our in-depth relationships with semiconductor partners. In these dynamic and often volatile markets served by the semiconductor industry, distributors such as Avnet Silica can play a vital role, offering not only market insights but also providing access to a broad portfolio of components, as well as supply chain expertise and technical support.
For more in-depth insights and the latest data, download the full Trendliner Q4 2025 report from Avnet Silica.
