AI drives the skyrocketing of the semiconductor industry! Bank of America predicts that the industry will exceed a trillion-dollar scale by 2027.

Bank of America Corp stated that due to the surge in demand in the field of artificial intelligence (AI), global semiconductor sales are expected to reach approximately $1 trillion by 2027. This forecast represents a significant increase from the bank's previous estimate of $860 billion. Analysts at the bank stated in a client report, "We believe that the growth prospects for storage chips (including High-Bandwidth Memory HBM, general-purpose DRAM, and NAND flash) and components related to data centers/AI will significantly improve, while the performance in consumer electronics/automobile sectors will slightly offset the overall growth." The analysts further added, "We still believe that the structural resilience of current AI infrastructure investments will surpass any previous large industry cycle, therefore maintaining an optimistic outlook on AI-related capital expenditures." Specifically, Bank of America Corp predicts that industry sales in 2025, 2026, and 2027 will reach $745 billion, $870 billion, and $971 billion respectively, an increase of about 3% to 6% from previous expectations. Excluding the storage chip sector, sales from 2025 to 2027 are expected to reach $538 billion, $621 billion, and $706 billion respectively. The bank also reiterated its top five stock picks in the field: NVIDIA Corporation (NVDA.US), Broadcom Inc. (AVGO.US), AMD (AMD.US), Lam Research Corp (LRCX.US), and KLA Corporation (KLAC.US), believing that these companies will benefit the most from the strong outlook for data center and storage spending. In addition to chip sales, Bank of America Corp analysts also updated their forecasts for semiconductor equipment spending, expecting expenditures to reach $118 billion, $128 billion, and $138 billion respectively from 2025 to 2027. While the growth intensity may slow down in 2026 and 2027, this aligns with the bank's view that chip equipment spending in the coming years will achieve "sustainable" growth. The analysts added, "Long term, we believe that the capital intensity of the semiconductor industry will stabilize in the range of 14%-17%, about 100-400 basis points higher than the historical average of 13%. The core reason for this change is the significant increase in the complexity of semiconductor manufacturing processes. Compared to previous forecasts, spending in data center/AI sectors is expected to rise, while spending in consumer electronics/automobile sectors is expected to decline." The analysts emphasized, "Our new industry model shows that storage chips and data center/AI sectors will experience faster growth, while the recovery in consumer electronics, personal computers, smartphones, and automotive terminal markets will slightly offset overall growth. It is worth noting that we currently predict a year-on-year growth rate of 55% and 28% for servers (chip only), wired infrastructure, and other data center-related components in 2025; as the industry enters a more widespread cyclical recovery from 2026-2027, the year-on-year growth rates for all terminal markets will further increase."