Maybank Investment Bank expects demand from artificial intelligence (AI)-related fields to remain strong and should be the key growth driver of the semi-con sector in Singapore.

The research house said in its recent note that 2025 was a better year for most semi-con players in Singapore, but still fell short of market expectations.

According to the note, the global AI-in-semiconductor market size is projected to grow from $56.4 billion in 2024 to over $174.5 billion by 2032, a compound annual growth rate (CAGR) of 15.2 percent.

It noted that AI demand has been the main growth driver in 2025.

Capital expenditures into AI and cloud infrastructure projected to be around $375 billion.

Maybank also highlighted that businesses are rapidly adopting AI, with enterprise adoption rising from 55 percent in 2023 to 78 percent in 2024.

North America holds the largest share of the global AI market, particularly in the United States, which has a market size of $74 billion in 2025 and leads in private AI investment.

AI demand has also led to strong demand in the memory space with DRAM and HBM, with HBM facing supply constraints due to packaging and yield challenges.

“AI Demand has also led to strong semi-con demand, which has flowed down to Singapore and Malaysia manufacturers. We are seeing ramp up of orders coming through for several companies,” said the research house.

According to Maybank, AI demand needs to continue to grow strongly to justify investment into the infrastructure for AI.

“The mismatch between skyrocketing capital expenditures and realized AI revenue is the defining challenge of the 2026 tech landscape,” it said.

It also said major hyperscalers from the largest five US Tech companies are committing an estimated $725 billion to data centers and AI hardware, forcing the industry to rapidly pivot from an “AI narrative” to an “AI proof” phase to justify this massive investment.

Key risks for the sector remains with geopolitical tensions, especially between the US and China.

“Any global conflicts could also hinder economic growth, which will lead to likely softer demand,

“In addition, further trade restrictions on the semi-con segment would likely impact global demand,” said Maybank.

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