Semiconductors 2025: Emerging trends shaping the tech revolution

Semiconductors play a role not just as components in gadgets but also in powering the advancements of modern technology such as artificial intelligence (AI) and autonomous vehicles, thus driving innovation.

According to McKinsey & Company, by 2030 the global semiconductor market will reach $1 trillion. Shifting focus to India, the industry is expected to expand from $23.2 billion to $80.3 billion by 2028 with a growth rate 17.10 %, as per the estimates from the Government of India.

This is not just numbers—it shows the larger picture of how semiconductors are reforming industries, driving innovation, and addressing global challenges.

Here is a look at what is shaping the semiconductor industry as we move closer to 2025.

Popularity of AI chips is increasing

AI technology has expanded beyond the confines of research labs. It can now be found in devices, like smartphones and smart homes as well as vehicles. Some chip manufacturers are developing hardware to meet the increasing requirements of AI applications. These chips are not limited to number crunching. They are built to efficiently process volumes of data with minimal power consumption. This advancement means smarter voice assistants, faster image recognition, and more responsive autonomous systems.

Focusing on sustainability

The production of semiconductors isn’t very environmentally friendly as it uses a lot of energy and water resources; however, things are evolving, and companies are now using eco materials and processes that save energy and promote recycling efforts to lessen their impact on the environment. The aligns with regulatory requirements and appeals to consumers who prioritise sustainability concerns. Manufacturers view this as essential for maintaining competitiveness.

Revamping chip design using 3D stacking techniques

Chips are no longer flat. Technologies like 3D stacking are layering them to pack more power into smaller spaces. Think of it as building skyscrapers instead of spreading out horizontally. Another innovation, chiplets, breaks down chips into modular pieces, making them easier to customize. This approach not only saves space but also boosts performance, especially for devices that demand high efficiency, like smartphones and IoT gadgets.

Edge computing

The era of depending on servers is coming to an end gradually as edge computing gains momentum. With edge computing, data processing happens closer to the source—whether it is a self-driving car or a smart home device. This reduces delays and makes real-time decisions possible. To make this work, semiconductors need to be faster and more efficient, pushing manufacturers to innovate. This trend will play a bigger role in sectors like healthcare, where instant data analysis can save lives.

Open-source chips

In the past chip design was a closely guarded secret. Now open-source designs enable collaboration among engineers and researchers as they share ideas and resources. This change reduces costs. It accelerates innovation. Smaller players who previously faced challenges in competing can now. Smaller players, who once struggled to compete, can now build and customize chips for niche applications. This is democratizing access to cutting-edge technology, ensuring that breakthroughs are not limited to a few big names.

Security becomes a priority

In today’s world of cyber threats and attacks, which are growing in sophistication by the day, safeguarding data is top priority for sectors such as finance, healthcare, and national security, where breaches can have wide-ranging impacts. Manufacturers are now integrating security mechanisms into the hardware at the chip level to ensure protection against unauthorized access or tampering.

Final thoughts

India is not just a consumer in the semiconductor space anymore—it is gearing up to be a major player. The government is offering incentives to attract manufacturers and investing in talent, with plans to train 85,000 engineers and specialists. Initiatives like the Production Linked Incentive (PLI) Scheme and the 2020 Semiconductor Policy are setting the stage for India to build its own chip-making ecosystem. The cost to establish a fabrication plant in India ranges from $5 to $7 billion (Government of India estimates), but the long-term benefits could position the country as a global hub.

The field of semiconductors is experiencing high levels of innovation and for India, opportunities are waiting to be explored. However, tapping into this potential will demand more than investments – it calls for a united effort involving government, educational institutions and businesses working hand in hand.

Sanjeev Kumar, Cofounder & CEO, Logic Fruit Technologies