Shanghai Electronics Fair| 2025 Outlook for the Electronics Industry: Dual Variations of AI Empowerment and Domestic Breakthroughs

In the global wave of digital transformation, the electronics industry is undergoing a profound transformation driven by both artificial intelligence (AI) technology and the process of localization. In 2025, as AI penetrates from the cloud to the edge, the semiconductor industry will enter a new growth cycle, while the acceleration of localization is reshaping the competitive landscape of the global electronics supply chain.

The Shanghai Electronics Fair believes that breakthroughs in AI technology have become the core engine for the recovery of the semiconductor industry. Since the second half of 2023, global semiconductor sales have rebounded with a sharp year-on-year growth rate, driven primarily by the explosive demand for AI cloud services. This trend not only reflects the large-scale application of AI in cloud computing but also signals the rise of edge AI scenarios—such as smartphones, personal computers, and smart home devices—where the demand for chip computing power and storage capacity is continuously increasing. For example, AI servers, AI PCs, and AI smartphones have significantly increased DRAM and NAND capacities per unit, pushing the storage market into a long-term expansion phase. According to WSTS, the global semiconductor memory market is expected to reach $167.1 billion in 2024, an 81% year-on-year surge, with a forecast to exceed $189.4 billion in 2025. At the same time, the demand for new storage technologies like HBM (High Bandwidth Memory) has surged, further highlighting AI's restructuring effect on the semiconductor supply chain.

In this wave of technological innovation, domestic semiconductor companies are accelerating breakthroughs to overcome the “bottleneck” challenges. The Shanghai Electronics Fair understands that the ongoing escalation of U.S. technology sanctions against China is forcing domestic industries to transform toward self-reliance. The Yangtze River Delta region, with its dense industrial clusters and policy support, has become the front line for domestic alternatives. The region leads the country in terms of the number of IC design enterprises and sales growth, and domestic AI chips are gradually narrowing the gap with international giants in key indicators such as computing power and energy efficiency. For example, Huawei's Ascend 910B chip is now comparable to Nvidia's A100, showcasing the potential of domestic technologies in high-end markets. In addition, the localization of packaging, testing, and semiconductor materials not only improves the industry chain ecosystem but also provides a risk buffer for the industry amid global supply chain fluctuations.

The deepening of localization and the integration of AI technologies are opening up new growth poles for the electronics industry. On the one hand, driven by AI, the popularity of smart terminals and IoT devices has led to massive chip demand, providing domestic companies with differentiated competitive space. On the other hand, breakthroughs in the application of domestic semiconductors in AI servers, autonomous driving, and industrial IoT are gradually breaking overseas monopolies. For example, domestic companies' technological accumulation in AI chip design is beginning to empower smart cities and intelligent manufacturing scenarios, driving the electronics industry from "replacement and following" to "innovation and leadership."

However, opportunities and challenges coexist. Global geopolitical tensions and the rapid pace of technological iteration require domestic semiconductors to seek a balance between open cooperation and independent innovation. Meanwhile, as Moore's Law approaches its physical limits, the industry is forced to explore disruptive technological paths such as 3D integration and Chiplets. In this context, policy support and industry collaboration are becoming increasingly important. In 2022, China’s R&D investment intensity reached 2.54%, and innovative tools such as technology insurance are helping companies mitigate risks. Moreover, regions like the Yangtze River Delta and the Pearl River Delta are building an ecosystem for technological breakthroughs through the collaboration of industry, academia, and research.

Looking ahead to 2025, the future landscape of the electronics industry will be driven by the dual engines of AI and localization. The deep penetration of AI technology will unlock more application scenarios, from edge computing to quantum chips, continuously expanding the boundaries of innovation. Meanwhile, the continued advancement of localization will likely enable China to evolve from the global electronics manufacturing workshop to a leader in setting technological standards. In this dual variation, China’s electronics industry will not only reshape its own competitiveness but also inject new momentum into the global semiconductor development, writing a new chapter in the industry’s evolution from scale expansion to value enhancement.

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