UBS Projects AI Data Center Power Semiconductor Market Jump to $3.8B by 2028
UBS forecasts the AI data center power semiconductor market to grow from $1.5bn in 2025 to $2.5bn in 2026 and reach $3.8bn by 2028, driven by server rack power density rising from 40kW in 2023 to 1MW by 2028. Power supply units and VRMs currently account for 70% of demand.
1. Market Growth Projections
UBS expects the AI data center power semiconductor market to expand from about $1.5bn in 2025 to roughly $2.5bn in 2026, reaching around $3.8bn by 2028 as demand for advanced power management chips accelerates.
2. Power Density Surge
Server rack power density is set to climb from approximately 40 kW in 2023 to as much as 1 MW by 2028, prompting shifts toward higher-voltage architectures such as 800-volt DC systems and more sophisticated voltage regulator modules.
3. Leading Suppliers and Risks
Power supply units and voltage regulator modules account for roughly 70% of semiconductor demand in AI servers, with Infineon and Texas Instruments leading, and Analog Devices, Renesas, ON Semiconductor and STMicroelectronics increasing exposure; growth may moderate if data center capacity additions slow or over-ordering occurs.