Will Chip Boom Last Through 2027? ETFs in Focus
South Korea expects the semiconductor industry to remain on a strong growth path through at least 2027, due to a persistent gap between chip demand and available supply. Finance Minister Lee Hyoung-Il shared this outlook during an interview with CNBC on the sidelines of the IMF-World Bank annual meetings in Bangkok on Saturday.
Lee said demand continues to outstrip supply by a wide margin, even as manufacturers work to expand production capacity. This imbalance could help sustain the industry’s growth over the next year.
According to Gartner, worldwide semiconductor revenue is projected to reach $1.6 trillion in 2026, up 92% year over year, and approach $1.9 trillion in 2027.
Bank of America (BofA) projects that the global semiconductor total addressable market (TAM) will nearly double to $3.2 trillion by 2030 (per a Stocktwits article and reported by Yahoo Finance), up from $1.7 trillion in 2026.
BofA now expects an 18% compound annual growth rate (CAGR) between 2026 and 2030, up from 14%, with memory chips and data-center components expected to drive much of the expansion.
ASML Points to Extended Order Book
ASML reported on Oct. 14 that customers were showing interest in orders extending into 2029 and 2030. The company plans to expand capacity for its advanced lithography machines, reflecting chipmakers’ continuing investment in production.
Note that ASML is the only company in the world that produces extreme ultraviolet lithography machines, a key tool used by the likes of TSMC, per CNBC.
Chip Stocks Slide Amid Rate and Competition Fears
The minister’s upbeat outlook comes after a sharp sell-off in semiconductor stocks last week. Concerns about potential interest rate hikes and intensifying competition from Chinese chipmakers weighed on the sector.
South Korean chipmakers, including SK Hynix and Seoul Semiconductor, came under pressure alongside U.S. industry leaders such as NVIDIA. The pullback highlights how quickly sentiment toward semiconductor stocks can shift, even as demand for chips remains strong.
Oversupply Concerns Cloud the Longer-Term Outlook
Not everyone is convinced that the semiconductor boom will continue indefinitely. An opinion column published Thursday in South Korea’s Maeil Business Newspaper urged the government to prepare for a potential slowdown in the AI boom.
The column cited expectations from two experts that a wave of new semiconductor supply could flood the market by 2029, intensifying competition in the memory-chip industry. Such an outcome could put pressure on prices and make the market increasingly competitive, as mentioned on CNBC.
China Threat
Tesla CEO Elon Musk cautioned that China will be “making a lot” of random-access memory (RAM) by 2028, adding to concerns that a future chip glut could expose South Korea’s dependence on Samsung Electronics Co. Ltd. and SK Hynix Inc., according to Benzinga, as cited by Yahoo Finance, as quoted on Yahoo Finance.
China’s ChangXin Memory Technologies (CXMT) said its fifth-generation DRAM platform entered mass production in September, with Reuters reporting that it delivers at least 50% more gross dies per wafer than its predecessor, according to the same Benzinga source.
The same article went on to explain that Reuters reported that CXMT held about 7.7% of the global DRAM market in 2025. However, it trails Samsung, SK Hynix and Micron in high-bandwidth memory used in AI accelerators. Musk previously acknowledged China’s manufacturing scale but said advanced memory “will be harder to solve.”
Bottom Line
Against this backdrop, investors will be watching whether chip demand can keep pace with expanding production capacity and whether the AI investment boom can sustain its momentum beyond 2027.
Despite the uncertainty, investors can consider semiconductor ETFs such as Strive U.S. Semiconductor ETF SHOC, State Street SPDR S&P Semiconductor ETF XSD, First Trust Nasdaq Semiconductor ETF (FTXL), Global X AI Semiconductor & Quantum ETF CHPS and VanEck Semiconductor ETF SMH.
Most ETFs have returned more-or-less 40% this year. However, FTXL is up about 65% in the year-to-date frame (as of Oct. 20, 2026)
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This article originally published on Zacks Investment Research (zacks.com).