THE EUROPEAN SEMICONDUCTOR MARKET IN 2025
18 April 2025
2024 was a year of strong growth for the semiconductor industry, driven by demand for AI and data centres, with the market reaching $626 billion. But there was no shortage of challenges, with post-pandemic overstocking creating imbalances, particularly in Europe.
Looking ahead, the industry is moving forward with growing caution, slowed by macroeconomic uncertainties, unstable demand across several segments, and geopolitical tensions that continue to strain global supply chains.
In 2024, the global semiconductor market grew by 18.1% to reach $626 billion in revenue. Strong demand for GPUs and AI processors for data centres contributed significantly, leading the industry to generate $112 billion, up from $64.8 billion in 2023.
Memory accounted for 25.2% of the total market, with DRAM growing by 75.4% and NAND by 75.7%. In particular, HBM memory accounted for 13.6% of DRAM sales, with growth forecast to reach 19.2% by 2025. Samsung Electronics regained the top spot in the industry thanks to higher memory prices, while Nvidia climbed to third place.
However, the European market did not experience similar growth, according to DMASS (Distributors and Manufacturers Association of Semiconductor Specialists). DMASS is the European association that collects and analyses data on electronic component sales, with a special focus on semiconductor distribution.
Their quarterly reports provide a detailed overview of the development of the European market and show that the second and third quarters continued with progressive declines of 33.1% in the first quarter and 38% in the second quarter.
This negative trend continued in the fourth quarter, with a 24.7% drop in total sales. This means that the semiconductor sector is now down 26.2% year-on-year.
One of the main problems in 2024 was excess stock following the pandemic. According to the Electronic Components Supply Network (ECSN), many manufacturers and distributors hoarded large quantities of components due to incorrect demand forecasts. This led to a 19.7% market contraction in the UK, with similar effects in other European regions.
Belgian automotive supplier Melexis reported lower-than-expected results for Q4 2024 due to significant destocking by customers. Revenues, estimated at between €200m and €210m, were well below market expectations (€255m), according to Reuters.
German wafer supplier Siltronic reported that continued high inventory levels were delaying a recovery in demand, despite a slight increase in sales in the fourth quarter due to the favourable dollar exchange rate.
These cases illustrate how overstocking has affected the entire European sector, delaying full recovery until inventories normalise.
Forecasts for the European semiconductor market are mixed. According to WSTS (World Semiconductor Trade Statistics), a global organisation that provides market data and forecasts for the semiconductor industry, the global semiconductor market is expected to continue to grow at a rate of 11.2% in 2025, bringing the total value of the industry to USD 697 billion. However, Europe could see a decline of 6.7 per cent due to reduced demand in some key segments.
ING bank also predicts that the global semiconductor market will grow by 9.5 per cent in 2025, driven by strong demand for data centre services and artificial intelligence. However, it points out that growth in other, more mature segments may stagnate and that European manufacturers, which do not focus on leading technologies, may not benefit from this trend.
Nevertheless, DMASS chairman Hermann Reiter remains optimistic for 2025, forecasting moderate growth rates allowing a partial recovery from last year’s decline.
At a time like this, Electronic Partner is here to help companies navigate the complexities of the semiconductor market, especially in the semiconductor sector. With 20+ years of experience and a global network of suppliers, we offer reliable solutions to ensure quality, compliance and business continuity.
Don’t be caught off guard! Contact us today to find out how we can help you navigate the market of 2025 with customised solutions and tailored strategic support.
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