We’re Living in a Smarter World
We’re living in a time when technology is starting to think, learn, and even help us make better decisions. It’s the era of voice assistants that can recognize our mood and cars that warn us before a collision. The world around us just keeps getting smarter.
The market for AI (artificial intelligence) is around 244 billion dollars in 2025 and is expected to grow to over 800 billion dollars by 2030. The expansion of the AI and IoT (Internet of Things) industries is literally changing the world.
And none of it would be happening without semiconductors (that are supplied by a semiconductor electronics distributor). Semiconductors are small chips that help your phone, computer, and TV work. And with the rise of AI and IoT, we need them more than ever.
In this article, you can learn more about what semiconductors are, why they matter, and how AI and IoT are influencing the growing demand for them.
So, What Exactly Is a Semiconductor?
A semiconductor is a small chip (usually made from silicon) that can conduct electricity under certain conditions. This ability makes it perfect for controlling electrical signals.
Semiconductors are the brains behind electronic devices. You can find them in almost everything: your laptop, washing machine, car, and even your TV remote. These chips are responsible for processing data, storing memory, and making these devices work smarter and faster.
The Role of AI and IoT in Everyday Life
Before we dive into how these industries are influencing the demand for semiconductors, let’s understand what they are.
AI (Artificial Intelligence) is when machines can think, learn, and make decisions.
Examples:
- Netflix recommending a show
- Your phone’s camera adjusting for a better selfie
IoT (Internet of Things) is when devices are connected to the internet to share and receive data.
Examples:
- Smartwatches
- Smart thermostats
- Voice assistants like Alexa
Why Is AI Pushing the Demand for Semiconductors?
AI systems need powerful chips to function. Here’s why demand is increasing:
- They need more power: AI requires chips that can handle massive data quickly.
- More devices are using AI: From healthcare to entertainment, AI is in more products.
- Edge AI: Devices now process data locally instead of relying on cloud servers, increasing chip demand per device.
How Is IoT Influencing This Demand?
Each IoT device needs a semiconductor to:
- Connect to the internet
- Process information
- Communicate with other devices
- Store and protect data
Here’s how IoT drives chip demand:
- A lot of devices: Billions of devices and growing—smart homes, factories, cities.
- The need for smart chips: Small devices need small, low-power but efficient chips.
- Constant data flow: Devices continuously send/receive data; chips must be fast and reliable.
- Real-time processing: Some devices need instant results, requiring stronger chips.
AIoT: Why the Demand for Semiconductors Is Exploding
AI and IoT combined = AIoT. This powerful combo accelerates semiconductor needs.
Example:
Smart traffic lights in Pittsburgh use AI to predict traffic and IoT to communicate with cars. This innovation requires high-performance chips that are:
- Compact
- Energy-efficient
- Capable of learning and communicating in real-time
What This Means for the Semiconductor Industry
The industry is working hard to meet demand. Here’s how:
- More investments: Billions are going into new factories and chip development.
- Smaller, smarter chips: Engineers are designing chips for small, powerful devices.
- Custom AI chips: AI accelerators are being developed.
- Focusing on security: Chips now include features to guard against cyber threats.
Small Chips, Big Impact
Semiconductors are the tiny engines powering our tech-driven world. As AI and IoT continue to grow, the demand for faster, smarter, more secure chips will only rise.
This shift is redefining how chips are designed, built, and integrated into our lives. We truly live in exciting times.
