Semiconductor Engineering State of the Market 2025

The semiconductor industry remains the backbone of digital innovation, from AI and cloud computing to autonomous vehicles and next-generation mobility. After a volatile 2023, the industry rebounded selectively in 2024 with strong growth in high-performance computing, AI accelerators, and advanced-node foundry services. However, this growth is uneven. While global leaders surged with cutting-edge R&D and close ties to hyperscalers, others struggled with legacy demand and geopolitical restrictions.

Amid these shifts, the engineering segment of the semiconductor value chain is transforming. Generative AI, chiplet architecture, photonic-electronic co-design, and heterogeneous integration are rethinking their design and manufacturing strategies. Simultaneously, automotive and consumer Original Equipment Makers (OEMs) are increasing their internal silicon initiatives. Additionally, Global Capability Centers (GCCs) have emerged as pivotal hubs to scale innovation, access talent, and mitigate supply risks.

This report serves as a comprehensive guide for stakeholders navigating the evolving semiconductor landscape. It offers a data-driven analysis of market dynamics, engineering outsourcing trends, provider positioning, and strategic imperatives for enterprises and suppliers.