AI Boom Boosts Electronic Chemicals Market

Artificial intelligence is reshaping every aspect of life, fueling strong demand for electronic chemicals. Amid unprecedented market growth intertwined with geopolitical tensions and traditional challenges such as new chip architecture technologies, global electronic chemical producers are seizing opportunities through technological innovation and regional diversification.

Jason Xi, Chief Research Analyst at S&P Global Commodity Insights, expects double-digit growth in the global semiconductor market by 2025. "The AI revolution has fundamentally transformed the industrial landscape, creating robust cross-sector demand," said Xi. "The growth rate of supporting chemicals and materials could be even faster."

AI as a Growth Engine

The primary driver behind the current expansion of the electronic chemicals market is the rise of AI and generative AI technologies.

However, the outlook for the semiconductor and electronic chemicals markets in 2025 is not entirely smooth. This highly cyclical industry has just emerged from its latest downturn. According to chip manufacturers and suppliers, the early recovery in 2024 was mild and uneven. Demand for chips supporting AI and high-performance computing (HPC) was one of the few bright spots last year and is now entering an accelerated phase in 2025.

Meanwhile, demand recovery in consumer electronics such as PCs and smartphones, as well as in automotive and industrial sectors, remains weak. "The global economy faces challenges, and concerns over tariffs and potential recession risks are affecting consumer confidence," Xi analyzed.

This caution is reflected across the entire supply chain. During Intel's April earnings call, CEO Lip-Bu Tan stated, 'The macroeconomic environment is becoming increasingly turbulent and uncertain.' In 2022, Intel announced plans to invest over $20 billion to build two cutting-edge chip fabs in Ohio. During the same call, Intel Executive Vice President and CFO David Zinsner noted that America's 'highly unstable trade policies' and regulatory risks increased the likelihood of economic slowdown.

Tariff Shocks Reshaping Supply Chains

Former U.S. President Trump's tariff policies have disrupted tech manufacturing. Xi pointed out: "Since most of the most advanced wafer fabs are located in Asia—particularly Taiwan Province of China and South Korea—an increase in tariffs could severely impact high-tech companies reliant on these chips." However, electronic chemicals deeply embedded in the semiconductor supply chain face relatively smaller direct impacts, and many companies are building new plants to secure key chemical supplies.

Randal King, CTO of Qnity, a DuPont Electronics company, said the firm has implemented tariff mitigation strategies such as 'localization of production': 'Our global operations network is designed to serve customers with faster innovation, higher quality, lower costs, and more reliable supply.' Qnity plans to complete its business spin-off on November 1, 2025, focusing on core areas including interconnect materials, advanced packaging, printed circuits, etchants, and photoresists.

Technological Innovation Drives New Demand

The AI boom is driving demand for advanced chips and accelerating innovation in chip design and manufacturing. As chip processes advance toward nodes of 5nm and below, demand for ultra-high-purity electronic materials is growing exponentially.

Tianyi Ma, Specialty Chemicals End-Use Analyst at S&P Global, said: 'Electronic chemicals used in advanced logic and memory chips require higher purity and more complex processes. Their market value growth is primarily driven by advanced chips, while volume demand comes from the full range of products, including both advanced and mature technologies.'

Industry consolidation is also accelerating: giants like Merck Electronics and DuPont are focusing on electronic chemicals through business spin-offs, and M&A activity is intensifying. King of Qnity emphasized: 'The shift from traditional monolithic designs to chiplet architectures is driving demand for new low-loss dielectric materials and advanced plating chemicals, making thermal management solutions increasingly critical.'