Kearney's State of Semiconductors 2025 Report: AI Devours Chip Supply, Tariffs Cement Global Division, Low Buyer Confidence in Supply and Availability

• AI server demand races ahead at 40-50% CAGR, using both advanced and mature nodes
• Trade barriers are hard-wiring an East-vs.-West supply chain 
• 65% confidence in resilience among semiconductor leaders, down from 82% last year 
• 42% of leaders expect advanced-node shortages
• Product design is biggest lever to improve supply chain resilience 

CHICAGO, May 30, 2025 /PRNewswire/ -- Today, global strategy and management consultancy Kearney and the industry association serving the global semiconductor and electronics design and manufacturing supply chain, SEMI, announce the release of their collaborative report State of Semiconductors 2025|Braving the Storm: Navigating an Uncertain Future, the partnership's first study on the unique challenges of semiconductor production and supply management. Based on a survey of 200+ global supply chain leaders and analysis of 60+ products and 5,000+ components, the comprehensive study shows an uncertain, pressured, and at-risk semiconductor supply chain ecosystem, with surging demand driven by AI applications and mature electronics, automotive and industrial uses, alongside likely supply shortages due to tempered capacity investments, AI's voracious chip consumption and trade war disruptions.

"The semiconductor industry stands at the center of global technological progress today," notes Kearney partner, global lead of PERLab and study co-author Bharat Kapoor. "Yet unlike oil, semiconductors are far from being a commodity, as they require meticulous coordination of intricate manufacturing processes, deep R&D investment, and highly skilled labor. This State of Semiconductors report points to deep fragmentation and uncertainty across systems, entities, regulation, and leadership at a moment when AI has gained supremacy in the chip supply chain—and it's crowding out everyone else."

The report delves into end-product wafer consumption by node size and industry—including consumer electronics, servers, automotive, industrial, consumer appliances and telecom—and fab capacity by node size and region—including Taiwan, China, Japan, the Americas, Europe and the Middle East, Korea and Southeast Asia. It points out how AI distorts traditional chip allocation, and shows industry share.

Kushal Fernandes, a partner in Kearney PERLab, adds: "Our analysis shows that tariffs have locked in a structural divide between Eastern and Western semiconductor ecosystems. Meanwhile, confidence among semiconductor buyers is impacted—only 65 percent of the leaders we spoke with feel confident about securing supply, a drop of 17 points from last year—and 42 percent expect shortages in advanced nodes. As AI demand accelerates, mature nodes remain critical and geopolitical tensions persist, the most prepared buyers will secure not just chips—but a competitive edge."

Areas covered by the report include:

• How tariffs are reshaping the semiconductor landscape
• Waning buyer confidence in supply chain resilience
• An overview of sectoral trends, including servers, consumer electronics, automotive, industrial, consumer appliances, telecom and medical equipment
• Industry deep dives with analysis of company performance, node size consumption, AI and more
• Charting of globalization and intervention scenarios, with forecasts of how each would play out
• Value chain bottlenecks on fab expansion, including lithography, packaging and talent

Bharat Kapoor concludes: "Supply chain resilience is no longer optional for manufacturers and purchasers of semiconductors. And we believe that the fastest route to supply chain resilience is product design—in particular, at this moment, changing design only where it moves the customer needle. Further, leaders need to be aware of developments in other chip-dependent industries, as they will be competing for the same supply."

Read the full report here.

Learn more about SEMI's World Fab Forecast

Learn more the SEMI Supply Chain Management Initiative

About the Kearney State of Semiconductors 2025 Report

This year's Kearney State of Semiconductors report is a multipronged look at the global semiconductor industry. The study is based on a Kearney survey of more than 200 semiconductor supply chain leaders, along with PERLab analysis of over 60 products and 5,000 components to arrive at the semiconductor composition of devices. Three market scenarios—baseline, constrained and surplus—were simulated for wafer consumption and fabrication capacity to see the variation of supply constraints. For more on methodology, please see Appendix: Model Methodology in State of Semiconductors 2025|Braving the Storm: Navigating an Uncertain Future.

About SEMI
SEMI^® is the global industry association connecting over 3,000 member companies and 1.5 million professionals worldwide across the semiconductor and electronics design and manufacturing supply chain. We accelerate member collaboration on solutions to top industry challenges through advocacy, workforce development, sustainability, supply chain management and other programs. Our SEMICON^® expositions and events, technology communities, standards and market intelligence help advance our members' business growth and innovations in design, devices, equipment, materials, services and software, enabling smarter, faster, more secure electronics. Visit www.semi.org, contact a regional office, and connect with SEMI on LinkedIn and X to learn more.

About Kearney

Since 1926, Kearney has been a leading management consulting firm and trusted partner to three-quarters of the Fortune Global 500 and governments around the world. With a presence across more than 40 countries, our people make us who we are. We work impact first, tackling your toughest challenges with original thinking and a commitment to making change happen together. By your side, we deliver—value, results, impact. To learn more about Kearney, please visit www.kearney.com.

About PERLab

The Product Excellence and Renewal Lab (PERLab), part of Kearney's Innovate network, is our global dedicated practice for "everything product." We help our clients make products that consumers fall in love with. Our design-driven approach to gross margin transformation offers end-to-end capabilities to support growth at every point in a product's life cycle. Our experts in product design, product development, sustainability, user experience, industrial design, IoT, consumer insights, product engineering, packaging design, and manufacturing excellence help organizations disrupt markets and leapfrog the competition. For more information, visit https://www.kearney.com/service/product-excellence-and-renewal-lab.

US press contact: 
Meir Kahtan
Meir Kahtan Public Relations
[email protected] | +1 917-864-0800

SOURCE Kearney