Intel, a leading American chip manufacturer, reports increased revenue while implementing workforce reductions.
In the dynamic world of semiconductors, 2025 is witnessing a robust growth driven by the rapid expansion of AI technology and related demands. This transformation is significantly impacting key players such as Intel, TSMC, Samsung, Nvidia, and SK hynix.
Nvidia, the world's leading AI chip provider, has caught Intel off guard, capitalising on the AI boom by supplying critical AI and data center processing units. Meanwhile, Intel, under the leadership of its new CEO, Lip-Bu Tan, reported a $2.9 billion loss in its earnings report, including $1.9 billion in restructuring charges, as it navigates challenges in the competitive semiconductor market.
TSMC and Samsung, the key foundries producing advanced nodes, are ramping up production capacity to meet the surging demand for AI chips. Despite the initial realignment of foundry capacity away from mature-node chips in the first half of 2025, production of legacy-node chips is expected to stabilize later in the year, catering to the needs of automotive and industrial sectors.
SK hynix, the world's second-largest memory chip maker, benefits from AI’s thirst for high-speed memory types, dominating the market for high-bandwidth memory semiconductors. The memory market, while facing pricing pressure in some segments, is experiencing robust growth, particularly in sectors related to AI. SK hynix is a key supplier for US titan Nvidia.
The automotive and industrial sectors are picking up momentum again, supporting a stable demand for mature-node chips. While AI has dominated growth, the rebounding demand for automotive semiconductors, driven by electric vehicles and more complex electronics, is contributing to renewed demand for these sectors.
The semiconductor equipment market is expanding, with investments in leading-edge logic, memory, and AI chip production driving equipment sales to a new industry high of $125.5 billion in 2025. Companies like Intel, which has internal fabs, and foundries like TSMC and Samsung, are investing heavily in state-of-the-art equipment to meet the increasing demand for advanced chips.
However, the industry is not without challenges. Non-AI segments like traditional analog and microcontrollers face pricing pressure due to inventory and competition, especially from Chinese manufacturers. Geopolitical tensions, such as the potential curbing of exports of state-of-the-art chips to China, add another layer of complexity to the industry landscape.
ASML, a leading provider of photolithography equipment, booked higher net profits in the second quarter of 2025 compared with the same period last year. Despite the strong fundamentals of its AI customers for the coming months and years, its CEO, Christophe Fouquet, warned of increasing uncertainty driven by macro-economic and geopolitical developments.
In the face of these challenges, the outlook for the semiconductor industry remains strongly positive, with record investments in equipment and fabrication capacity. The AI-driven growth is set to continue, making 2025 an exciting year for the semiconductor industry.
[1] Semiconductor Industry Association [2] TechInsights [3] Market Research Reports [4] Strategic Analysis
- Malaysia, given its growing emphasis on technology and innovation, is positioned to capitalize on the growing demand in the semiconductor industry, particularly in the development of artificial intelligence.
- As the world's leading AI chip provider, Nvidia's success in the AI-driven business sector could attract foreign investments, potentially benefiting Malaysian businesses and the finance industry.
- To maintain competitiveness in the rapidly evolving semiconductor industry, Malaysian businesses could collaborate with industry leaders such as Intel, TSMC, Samsung, Nvidia, SK hynix, and TechInsights for strategic analysis and market research reports.
