The new chip race: U.S. and China are redefining the competitive semiconductor landscape

Understanding regional semiconductor dynamics begins with a multi-year view of the megatrends shaping the industry. A good starting point is the reference year 2023, when the COVID-era demand bubble finally deflated and memory prices collapsed under the weight of overproduction. At the time, a new growth cycle was already forming, driven by the accelerating adoption of generative AI, though its full impact was not yet obvious. In 2023, global semiconductor device revenue stood at $525 billion.

As the year draws to a close, it’s the perfect moment to look back at the past months and reflect on how the competitive semiconductor landscape has evolved. The U.S.–China dynamic remains central to every strategic discussion, with commercial and geopolitical tensions continuing to shape the industry in profound ways.

So, as we reach the end of 2025, where do we stand? What strategies are leading semiconductor players putting in place? And what can we expect next?

In his latest analysis, Pierre Cambou, Principal Analyst, Global Semiconductors at Yole Group, offers a concise yet insightful snapshot of today’s semiconductor ecosystem. Drawing on the deep expertise of Yole Group’s analyst teams and insights from the Global Semiconductor report series, this article provides a clear and thoughtful conclusion to an intense year for the industry.

So grab a coffee, maybe even a slice of cake, and enjoy the read!

From that baseline in 2023, the industry recorded a remarkable 24% year-on-year increase, reaching $651 billion in 2024, as analyzed in depth in the 2025-H2 Overview of the Semiconductor Devices Industry Report. This figure excludes HBM content integrated into AI accelerators. When Yole Group’s analysts consolidated these components in their 2025-H1 assessment, total revenue had reached a preliminary $672 billion. As of 2025-Q4, this outlook for 2026 projects semiconductor device revenue of $793 billion, representing another 22% year-on-year growth. At this stage, analysts observe no indication that the current growth trajectory is slowing.

During the 2023 downturn, global wafer production stood roughly 8,500 kWpm, with foundries operating at an average utilization rate of 81%. In 2024, total installed capacity continued to increase as new foundries came online; utilization declined to 74% as supply expanded faster than the market could absorb.

In 2024, Taiwan, China, and South Korea each accounted for roughly 21% of global wafer production capacity. The United States, Japan, and Europe held around 10% each, while Malaysia, Singapore, and the rest of the world together accounted for the remaining ~6%. This distribution underscores how broadly wafer manufacturing is spread across the principal regional powers. Even substantial investment programs shift this balance only gradually, as capacity growth is inherently slow and incremental.

This position is supported both by the presence of Korean megafabs on its territory and by the sustained domestic capacity build-up accelerated over the five years following the Huawei ban and subsequent technology restrictions imposed by the successive U.S. administrations.

Since the onset of the “chip war” in 2019, formalized in writing by C. Miller in 2022, the Chinese device industry has undergone a steady transformation. In 2024, for the first time, China’s semiconductor device ecosystem grew faster than the global semiconductor industry.

As a result, China-headquartered companies increased their market share from 5% to 6%, a notable shift given the strong worldwide upswing.

This evolution stands as the scale and cadence of AI-chip investment are such they overshadow the growth of the Chinese ecosystem, making the latter easy to miss when looking only at headline figures. In 2025, China’s semiconductor ecosystem mirrors the global industry in the breadth and diversity of companies, yet its aggregate revenue remains comparatively modest.

With capacity, capability, and policy support fully aligned, this ecosystem is positioned for sustained expansion. Yole Group announces figures expected to show at least a 16% CAGR over the next five years, reaching $100 billion by 2030.

Behind the scenes, two megatrends, therefore, are shaping competition for the 2025 to 2030 period:

The outcome of this race will ultimately redefine the global technology landscape, reshaping power dynamics, dependencies, and the strategic positioning of entire industries. At Yole Group, analysts will continue to track the signals, decode the shifts, and keep you informed every step of the way.

For the coming year, Yole Group’s team has built an exciting program of reports and monitors, with investigations already underway. The new portfolio is now available, offering fresh insights into the markets and technologies that will shape tomorrow.

So don’t wander too far. Stay connected with Yole Group through editorials, interviews, events, and upcoming publications!

Pierre Cambou, MSc, MBA, is Principal Analyst, Global Semiconductors at Yole Group.

Pierre’s mission is dedicated to market & technology analyses of the semiconductor industry.

At Yole Group, Pierre has authored numerous market & technology products. Acknowledged as an expert in the semiconductor industry, he is regularly interviewed and quoted by leading international media.

Previously, Pierre held several positions at Thomson TCS, which became Atmel Grenoble (France) in 2001 and e2v Semiconductors in 2006. In 2012, he founded a semiconductor startup, now part of Jooxter.

Pierre holds an engineering degree from Université de Technologie de Compiègne (France) and a Master of Science from Virginia Tech. (VA, USA). Pierre also graduated with an MBA from Grenoble Ecole de Management (France).

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Source: www.yolegroup.com