Global semiconductor sales reached $71.3 billion in October 2025, a robust 33% year-over-year (YoY) increase, according to data from the Semiconductor Industry Association (SIA). The surge is being driven primarily by the explosive growth of AI-related infrastructure.
🔑 Key Sales Drivers #
- DRAM led global semiconductor growth with a 90% YoY surge, hitting $12.82 billion.
- Additional chip categories also performed strongly:
- NAND Flash: Up 13% YoY to $5.13 billion.
- Analog Chips: Up 18% YoY to $7.93 billion.
- Microcontrollers (MCU): Up 18% YoY to $1.88 billion.
🏭 Market Squeeze and Capacity Crunch #
The meteoric rise in DRAM demand is tied directly to the construction of AI infrastructure, but global manufacturing capacity is struggling to keep pace.
Much of the industry’s resources have shifted to producing High Bandwidth Memory (HBM) due to its higher profitability. As a result, output for standard DRAM and 3D NAND has fallen. With new fabs taking years to build, experts expect supply tightness to persist until 2027–2028.
- Pricing Pressure: TrendForce reports that some memory prices have more than doubled since February.
- Falling Inventory: DRAM supplier inventory has dropped from 13–17 weeks in late 2024 to just 2–4 weeks in October.
- AI Buyers Dominating Supply: TrendForce Senior VP Wu Yating notes that large AI buyers, with stronger finances and higher inventory targets, will procure far more than the current demand forecasts for 2026 (66%) and 2027 (70%). This will further squeeze supply for PCs and smartphones.
📱 Impact on the Smartphone Market #
The tightening memory market is creating significant challenges for smartphone manufacturers:
- Critical Inventory Decline: Smartphone DRAM inventory has fallen to below 4 weeks, far below the healthy 8–10 week range.
- Forced Procurement Incoming: By early 2026, smartphone makers will need to buy DRAM aggressively to restock, even at elevated prices, to maintain production schedules.
🛠️ Product Configuration and Cost Pressures #
- Potential Configuration Downgrade: The trend toward higher storage capacities may reverse next year. Some brands are evaluating shifts from 12GB + 512GB to more economical 8GB + 256GB setups.
- Low-End Models Hit First: Significant reductions in DDR4/LPDDR4X production this year mean price spikes will impact entry-level smartphones earliest.
- Rising BOM Costs: DRAM prices are expected to grow over 75% YoY, making DRAM the largest contributor to smartphone cost increases. Since DRAM typically accounts for 10–15% of the total BOM, overall smartphone manufacturing costs may rise 8–10% in 2025.