Outlook Supplement - Flipbook - Page 7
Forecast
by expanding production capacity
and by strengthening domestic supply
chains. TechInsight’s research suggests
that China is already able to produce
technology beyond 7nm. China is also
closing the gap in terms of the number
of AI models with US, having released
around 40% of all models launched
worldwide so far.
US companies, nevertheless,
are likely to continue selling custom-created chips to China in 2026
that overcome performance and feature
restrictions imposed by the American
government. China market sales for AI
chips are projected to increase in 2026,
following a decline in 2025.
Summary
In 2026, we’ll continue to see AI
accelerate innovation, while the rest of
the market remains flat by comparison.
Traditional technologies are increasingly
unable to meet the power, performance
and scaling demands of AI semiconductors. Expect the biggest tech stories
of the new year to solve these packaging,
power and memory bottlenecks.
2026 Forecast: Cautiously
Optimistic, but Highly Uncertain
MALCOLM PENN, Founder &
CEO, Future Horizons
Q3 2025 delivered one of the strongest
growth quarters on record, surpassed
only by Q3 2009, lifting full-year 2025
growth to 22 percent. However, this performance reflects a tale of two markets.
Growth was heavily concentrated in AI
infrastructure and HBM memory, not
traditional end markets such as smartphones, notebooks, wearables, TVs, and
automotive.
Critically, growth was ASP not unit
driven. IC unit volumes have yet to
recover. While 2025 may appear to
resemble a supercycle, it does not represent a broad-based industry recovery.
Looking ahead to 2026, the outlook
is cautiously positive—but highly
uncertain.
The primary risk is a slowdown, or
even a pullback, in hyperscale data
center investment. Investors are already
voicing concerns about unclear revenue
visibility, cash-flow, and the potential
for overinvestment. At the same time,
the long-anticipated recovery in non-AI
markets remains elusive. Global economic headwinds, geopolitical uncertainty, and a lack of compelling new
features continue to suppress demand,
with no clear inflection yet in sight.
Key questions remain unresolved:
when unit growth will resume, whether
ASPs can continue to rise, and how
non–bleeding-edge CapEx—particularly in China—will impact supply-demand dynamics. These factors
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