Semiconductor industry revenue to hit $1.3 trillion in 2026, as memory crunch hits consumers

The satellite volition walk a staggering $1.3 trillion connected semiconductors successful 2026, marking the largest maturation successful 2 decades, marketplace probe institution Gartner reported connected Wednesday.

The fig shows a 64% year-over-year gross summation for semiconductor companies, and it’s not conscionable AI chips doing the dense lifting.

According to Gartner, representation chips and networking capabilities volition play a large relation successful the ongoing boom.

“Amid precocious request for AI processing, information halfway networking and power, and representation terms ostentation (memflation), the semiconductor manufacture is projected to execute a 3rd consecutive twelvemonth of double-digit maturation successful 2026 — a milestone that underscores the sector’s pivotal relation successful the AI exertion stack,” Gartner elder main expert Rajeev Rajput said successful a statement.

Memflation refers to the continuing terms hikes connected representation chips needed to powerfulness AI servers. Only a tiny fig of companies marque representation semiconductors, including Micron (MU), Samsung (005930.KS), and SK Hynix (000660.KS).

And due to the fact that information halfway representation carries higher margins than user people memory, those companies are focusing connected producing information halfway representation chips alternatively than those that slot into laptops oregon smartphones.

Micron, for example, killed disconnected its Crucial user representation marque to absorption much connected information halfway chips, which person been a boon for the company.

In its March net report, Micron announced net per stock (EPS) of $12.20 connected gross of $23.86 billion. That amounts to an EPS summation of 682% year-over-year and a gross leap of 196%.

Wall Street was anticipating EPS of $9.00 connected gross of $19.7 cardinal twelvemonth implicit year.

Micron banal is up 104% implicit the past 6 months and 512% implicit the past 12 months. Shares of rival SK Hynix are besides up much than 500% implicit the past year.

Storage spot shaper Western Digital? That company’s banal is up a whopping 920%.

But the representation crunch is besides putting the compression connected user electronics companies, which present person to combat for a smaller magnitude of memory.

According to Gartner, representation prices volition summation 125% successful 2026, portion retention spot prices volition ascent 234%.

“Memflation volition destroy, oregon astatine slightest delay, non-AI request into 2028, to varying degrees depending connected the application,” Rajput said.

“Technology suppliers should hole for higher prices during the archetypal fractional of 2026, followed by persistent but moderating terms increases passim the remainder of the year. CIOs and IT leaders should beryllium cautious astir signing proviso agreements with unfavorable pricing presumption that widen beyond 2027.”

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