India’s AI data-centre push could drive 5% of global chip demand by 2030

The global semiconductor industry is set for a sharp growth spurt, with revenue expected to hit $1.6 trillion in 2026 and approach $2 trillion in 2027, according to Gartner.

For India, the bigger story is the growing AI data-centre buildout and what the global chip shortage could mean for smartphone and PC prices.

AI data centres are expected to account for 36.5% of global semiconductor revenue in 2026 and more than 53% by 2030. India’s share will remain relatively small, but its AI data-centre expansion could account for as much as 5% of global semiconductor demand by the end of the decade, Gartner said.


Also Read: The AI pilot era is ending. Now enterprises are worrying about the bill, says Snowflake

“India AI data center is a big growth story over a rather small base,” Shrish Pant, director analyst at Gartner, told ET Online.

Hyperscalers and data-centre companies are expected to continue investing in India, helped by relatively economical power and the country’s large digital user base. India, however, is unlikely to account for a double-digit share of global AI data-centre capacity.

Globally, semiconductor revenue is expected to jump 92% in 2026 from $809 billion in 2025. The growth is being driven by AI infrastructure spending and a sharp memory pricing cycle.

Memory crunch hits India

Memory is expected to be the biggest contributor to the growth. Gartner forecasts memory revenue at $837 billion in 2026, or 54% of total semiconductor revenue, up from 27% in 2025. It expects memory revenue to cross $1 trillion in 2027.

DRAM revenue is forecast to surge 246.6% this year, while NAND flash revenue could rise 371.9%.

The impact is already being felt in India’s consumer electronics market.

Memory and storage now account for more than half of the bill of materials for smartphones and PCs, Pant said. An 8GB RAM + 256GB storage configuration costs more than $150 in component costs, making memory increasingly expensive for entry-level and mid-range devices.

This is forcing smartphone makers to cut back on DRAM and NAND specifications even as on-device AI creates demand for more memory.

Also Read: AI agents can catch ‘mind viruses’ from each other

“In an age of one-device AI where models run natively on smartphones, who would've imagined in late 2025, we would consider a 4 GB smartphone at Rs 20,000,” Pant said.

Gartner expects smartphone and PC prices to rise 20% to 30%, while entry-level and mid-range shipments could decline more than 20%. Premium devices are likely to fare better as manufacturers struggle to protect margins at the lower end.

“The PC story is no different,” Pant said, noting that competition is fierce and margins are under pressure for products priced below $600.

Apple could have an advantage, thanks to its vertical integration and unified memory architecture, which requires less RAM.

The AI boom is therefore creating a paradox for India: the country is building more AI infrastructure and consumers are demanding more AI-capable devices, even as the memory needed to power them becomes significantly more expensive.