AI Boom to Fuel 49% Surge in Semiconductor Revenues by 2026

The report noted that "AI-related investment growth remains strong, particularly for semiconductors," highlighting the sector as a primary beneficiary of accelerating AI deployment across industries.

Analysts in the report project a sharp rise in semiconductor revenues, stating that they "expect global revenue growth of 49% from current levels by the end of 2026."

The surge is being driven by rising demand for AI-linked hardware and infrastructure. Goldman Sachs observed that "AI-related hardware revenues could rise to over $700bn in 2026Q4," underlining the scale of the ongoing investment cycle.

At a macro level, AI-driven capital expenditure is also accelerating. The report highlighted that "AI-related investment in the US national accounts... now stands at $325bn (1.1% of GDP) above its 2022 level," reflecting sustained spending on compute, servers, and semiconductor supply chains.

Global trade data further reinforces the strength of the cycle. Despite minor monthly fluctuations, "AI-related hardware shipments from Taiwan... remained elevated at $44.6bn in February," signalling continued demand for chips and related components.

While overall AI adoption across firms remains moderate, AI adoption by firms now stands at 18.9%, the report suggests that infrastructure-heavy sectors like semiconductors are already experiencing outsized gains from early-stage deployment.

"AI adoption by firms now stands at 18.9% among US establishments (with adoption expected to rise to 22.3% in the next six months)," the report said, citing data from the US Census Bureau's Business Trends and Outlook Survey.

The report noted that adoption remains concentrated in sectors that rely heavily on digital infrastructure and data.

"Information services, professional services, education services, and finance/insurance firms continue to lead adoption," it said.

The report also highlighted that larger firms are leading the AI transition.

"Establishments with over 250 employees continue to lead in adoption (35.3%)," while establishments with 20-49 employees have shown the largest increase in adoption recently.

Despite rapid technological progress, the report said the overall impact of AI on labour markets remains limited so far.

"There is no meaningful correlation between AI adoption and other labour market slack measures," the report noted.

Layoffs directly linked to AI also remain relatively small. "Only 4.6k employees were affected by corporate layoffs attributed to AI in February," it added.

At the same time, new job creation is emerging in sectors linked to AI infrastructure.

"Construction jobs exposed to the data centre build-out have increased by 212k since 2022," reflecting rising demand for data centre capacity needed to support AI systems.

The report also pointed to productivity gains from the deployment of generative AI tools.

"Academic studies imply a 23% average uplift to productivity, while company anecdotes imply slightly larger efficiency gains of around 33%," it said.

In conclusion, the report states that industries with higher AI adoption rates are beginning to show slightly faster productivity growth in official economic data.

- ANI