BofA Projects Chip Market to Reach $3.2T by 2030

Bank of America projects the global semiconductor market will expand from $1.7 trillion in 2026 to $3.2 trillion by 2030. This forecast suggests a near-doubling of industry revenue over the next four years, driven primarily by sustained demand for artificial intelligence infrastructure and data-center components. The bank attributes this growth to strong customer orders and long-term contractual commitments that remain robust despite recent market volatility.

The Philadelphia Semiconductor Index reflects this underlying strength, showing a year-to-date gain of 59.14% despite a recent five-session decline. BofA analysts note that the sector has delivered a 91.19% return over the past year, indicating that investor confidence remains high. The firm believes that tight supply conditions and pricing power will support earnings growth across the industry through the end of the decade.

Memory and Core Chip Sales Growth

Memory components are expected to become the largest driver of semiconductor revenue. BofA estimates memory sales will rise from $937 billion in 2026 to $1.8 trillion by 2030. This segment is critical for AI workloads, which require high-bandwidth data access. The growth in memory sales is projected to outpace other categories, accounting for a significant portion of the total market expansion.

Core semiconductor sales are forecast to increase from $739 billion in 2026 to $1.35 trillion in 2030. This includes processing units and networking chips essential for data-center operations. Server-related sales are also expected to grow substantially, rising from $359 billion to $848 billion over the same period. These figures indicate that the demand for computational power is spreading beyond single components to full system-level infrastructure.

Supply Constraints and Capacity Commitments

BofA highlights that supply remains tight through 2027 and into 2028. The bank notes that compute, networking, and memory vendors are largely fully booked for 2027 due to long-term agreements. This scarcity is supported by strong demand for CPUs, XPU attach, and new optics-based scale-up solutions. The limited capacity ensures that pricing power remains with manufacturers, supporting margins and revenue growth.

Spending on wafer-fabrication equipment is also expected to more than double, reaching $359.8 billion by 2030 from $155.9 billion in 2026. This capital expenditure indicates that chipmakers are investing heavily to meet future demand. The expansion of fabrication capacity is a long-term strategy to secure supply chains, which BofA views as a positive signal for the industry's structural growth.

Risks from AI Spending Slowdown

The primary risk to this outlook is a potential slowdown in hyperscaler AI spending. BofA acknowledges that safety concerns and calls for a pause in AI development could dampen demand. However, the bank argues that current customer commitments and pricing trends suggest that near-term momentum will persist. The firm remains bullish, noting that the depth of contractual obligations provides a buffer against short-term demand fluctuations.

According to GN stocks/chips data, the semiconductor sector continues to attract institutional interest through diversified ETFs. These funds offer exposure to the broad industry growth narrative, allowing investors to capture the upside from memory, core chips, and server sales. The bank's forecast underscores the importance of maintaining positions in the sector as capacity constraints and AI demand continue to align in favor of suppliers.