The semiconductor market smashed through $300 billion in quarterly revenue as AI demand turned memory into the industry’s money printer.
According to a report from Omdia beancounters, semiconductor revenue grew 27 per cent in the first quarter of 2026 from the fourth quarter of 2025, reaching $319 billion. The surge followed a record-setting year for the chip industry and showed that the new year was not giving the market much chance to cool off.
Memory revenue did most of the work, rising more than 80 per cent sequentially in the first quarter of 2026. Since Omdia began tracking the semiconductor market quarterly in the first quarter of 2002, the 27 per cent quarter-on-quarter growth is the highest it has seen.
The market has now put together three consecutive quarters of double-digit revenue growth. Omdia expects the second quarter of 2026 to keep the pattern going. That puts semiconductor revenue on course to pass $700 billion in the first half of 2026.
AI-related demand remains strong, while memory supply and demand imbalances are still among the biggest forces pushing the semiconductor market about.
Dynamic random-access memory and NAND flash both kept growing, nearly doubling revenue in a single quarter. AI demand has hit both DRAM and NAND markets, with average selling prices rising sharply.
Together, those two components accounted for more than 40 per cent of all semiconductor revenue in the first quarter of 2026. That is miles above the long-term average of about 20 per cent revenue share.
NAND was the star turn inside the memory market. Revenue reached just less than $48 billion in the first quarter of 2026, rising 96 per cent quarter on quarter. Pricing increased across the market, with NAND average selling prices jumping 95 per cent sequentially.
Omdia said the increase was driven by sustained demand for AI and data centres, alongside ongoing supply constraints.
Omdia expects NAND market momentum to continue through the second quarter of 2026, supporting more revenue growth and price rises.
Outside memory, growth looked much more like the old semiconductor market. Removing memory IC revenue shows the first quarter of 2026 market still grew, but at a much less ridiculous pace.
Non-memory semiconductor revenue rose just more than two per cent quarter on quarter in the first quarter. Historically, revenue for the overall semiconductor market and the non-memory bit falls by about four per cent in the first quarter.
Some components behaved in the usual seasonal way. Microcontrollers, discretes, and optical markets saw slight-to-mid-single-digit quarter-on-quarter declines. Other components did better, especially those tied to AI and data centre kit.
That was enough to deliver modest growth to the non-memory side of the chip market, rather than the usual first-quarter wobble.
Omdia expects strong growth to continue in the second quarter of 2026, with memory revenue still dragging the wider market uphill. Quarterly growth is expected to be lower than in the first quarter. Even so, Omdia reckons it will be enough for more than 20 per cent sequential growth.
Omdia practice leader Clifford Leimbach said: “Four consecutive quarters of double-digit revenue growth for the market show the strength of the current demand for semiconductors. This expected growth would bring 1H26 to over $700bn, well on track to surpass the $1tn threshold this year.”
