According to David MacQueen, CEO of TechInsights, “Data centers will continue to drive growth in 2026, particularly with regard to accelerators and processors and support for large language models (LLM), which will create a bottleneck in power supply. Despite the advantages of on-device inference, such as reduced costs, energy efficiency, and privacy, cloud-based AI will be the primary market driver, and the shift to autonomous edge machines will not become a mainstream trend in 2026.”
The industry will reach a pivotal moment in 2026, transitioning from FinFET transistors to gate-all-around (GAA) transistors with next-generation 2nm manufacturing processes, promising lower power consumption and improved performance. High-bandwidth memory (HBM), the highest-margin memory product ever, used almost exclusively for artificial intelligence (AI) accelerators, continues to drive the memory market. In the future, it could be superseded by high-bandwidth flash memory (HBF); TechInsights expects to see HBF prototypes launched in 2026. Furthermore, next year promises to be a turning point for silicon photonics, in the form of co-packaged optics (CPO) and glass substrates, which help improve data transfer performance while addressing heat dissipation and power consumption.
“The rapidly evolving technology landscape seems almost slow compared to the pace of change at the global political level, with tariffs and trade restrictions creating a volatile business environment,” MacQueen added. “The industry will have to navigate an increasingly contentious and fragmented geopolitical landscape. Tariffs and export restrictions, which particularly affect trade between the United States and China, are more likely to intensify than ease by 2026.”.
TechInsights will publish its series of reports on the outlook for the semiconductor market, covering memory, advanced packaging, artificial intelligence (AI), automotive, PCs/laptops, mobile and much more, between October and November, according to the publication schedule below.
