AI demand lifts silicon wafer shipments 13.1% in Q1

Worldwide silicon wafer shipments rose 13.1% year on year in the first quarter to 3,275 million square inches, according to SEMI, as strong artificial intelligence-related demand supported the market.

Shipments fell 4.7% from the previous quarter's 3,437 million square inches, a decline SEMI said was in line with typical seasonality. In the first quarter of 2025, shipments were 2,896 million square inches.

Silicon wafers are the base material for most semiconductors, making shipment data a closely watched indicator of chip production trends. The latest figures suggest continued strength in parts of the market tied to AI infrastructure, while other end-markets remain under pressure.

Ginji Yada, chairman of SEMI SMG and managing executive officer and general manager of the sales and marketing division at SUMCO Corporation, said demand from AI data centres remained a major source of support.

"Silicon wafer demand related to AI data centers continues to be strong, including advanced logic and memory, and also now extending to power management devices," Yada said.

The data also suggests the recovery in wafer demand is spreading beyond the parts of the semiconductor industry most exposed to AI. Yada said some improvement is emerging in industrial applications as excess inventory is worked through.

"Overall, silicon wafer demand has improved, but the recovery is not uniform. Many device companies have noted improvements in the industrial semiconductor segment, and this is creating a more broad-based recovery as wafer inventory is absorbed. Weaker smartphone and PC shipments in the first quarter of this year may show the impact of tighter supply of memory due to AI high bandwidth memory (HBM) allocation decisions," he said.

Mixed demand

The contrast between AI-related demand and weaker consumer electronics demand remains a defining feature of the semiconductor market. Advanced logic and memory used in AI systems have supported wafer volumes, while softer smartphone and PC demand has continued to weigh on broader chip consumption.

That split matters because wafer shipments sit near the start of the semiconductor supply chain. Changes in wafer demand can signal how chipmakers are adjusting production plans across memory, processors, power devices and industrial semiconductors.

The reference to high-bandwidth memory allocation decisions points to one of the market's main shifts. As manufacturers direct more memory output towards AI applications, supply available for other uses can tighten, potentially affecting production patterns in consumer devices such as smartphones and personal computers.

Industry gauge

SEMI publishes the shipment figures through its Silicon Manufacturers Group, which tracks conditions in the silicon wafer industry. The group covers companies producing polycrystalline silicon, monocrystalline silicon and silicon wafers, including cut, polished and epitaxial wafers.

The figures are reported in million square inches, a standard industry measure of total wafer area shipped worldwide. Because wafer diameters vary, measuring area rather than unit count provides a broader view of output across the market.

Wafers are highly engineered thin discs that act as the substrate on which most semiconductors are fabricated. They are produced in sizes of up to 300 mm in diameter and are used across a wide range of electronics, from consumer devices to industrial equipment and data-centre hardware.

The year-on-year gain suggests chipmakers and their customers bought more wafer material than a year earlier, even though the sequential decline shows demand has not risen in a straight line. The market is improving, but unevenly, with gains concentrated in areas tied to AI infrastructure and early signs of better conditions in industrial semiconductors.

Shipments of 3,275 million square inches put the quarter well above the level of a year earlier, but still below the immediately preceding quarter, underscoring the mixed conditions suppliers continue to navigate.