Onsemi expects AI data-center revenue to more than double in 2026 as cyclical recovery takes hold

Onsemi’s financial results signal a significant uptick in demand for AI data-center semiconductors, reshaping the entire supply chain dynamics. Upstream IP and foundry players are shifting focus toward high-performance computing chips, especially in AI training silicon, with capacity expansion expected to accelerate by 2026. Midstream packaging and testing firms face structural adjustments, needing rapid adaptation to high-bandwidth memory and advanced packaging technologies. Downstream server vendors are optimizing product portfolios to improve system efficiency. From a compliance standpoint, geopolitical tensions are heightening supply chain risks, particularly in procurement involving Taiwan, China and Hong Kong, China, prompting companies to diversify sourcing strategies. Competitors like Infineon and STMicroelectronics may accelerate investments in AI compute chips to gain market share. Over the next 12 to 24 months, AI data centers will drive the semiconductor recovery cycle, though inventory rebuilding remains stalled, leaving the industry’s recovery trajectory uncertain.