By Jonathan Cassell
The stunning rise in semiconductor demand in Q1 indicates that the global chip industry is on track to achieve record-breaking revenue this year, resulting in worsening supply constraints for buyers.
The Commodity IQ Demand Index for semiconductors surged by 13.1% sequentially in Q1, marking the highest month-to-month increase in at least five years. The overwhelming demand increase caused inventory levels to dwindle, resulting in a sharp extension in lead times.
The Commodity IQ Inventory Index for semiconductors declined 24.2% sequentially in Q1 to a rock-bottom level of 54.2. Meanwhile, the lead time index for semiconductors soared by 13.7% in Q1 and is expected to rise by another 10.2% in Q2.
The Q1 demand surge represents an early indicator that the semiconductor market is poised for massive growth in 2026, due to an acceleration in the AI boom. Global semiconductor revenue is projected to reach an all-time high of about $1.3 trillion in 2026, up more than 60% from 2025, according to one market researcher. Chips for AI processing, data center networking, power and memory are driving the market higher.
Reflecting this trend, memory experienced the second-fastest growth of all product classes covered by the Commodity IQ Demand Index, rising by a stunning 62.3% sequentially, and by 66.8% year-over-year in Q1. These growth margins represented at least five-year highs on the index.
Programmable logic also set a new high for sequential growth, with a 19.1% increase. Programmable devices are often used in AI-related tasks, including inference acceleration, control, interconnect, and data-center platform design.
However, the rise in demand in Q1 was not limited to a few narrow semiconductor categories. The Commodity IQ Demand Index shows that most semiconductor part classes (52.9%) posted positive sequential growth in Q1, up from 29.4% in Q4 2025.
That kind of breadth expansion suggests the upcycle widened beyond a handful of isolated categories and started to pull through more semiconductor types. In 2026, the semiconductor market is being driven not just by AI processing itself, but also by related data center tasks.
As a result, many part classes are experiencing soaring lead times. In Q1, the semiconductor part classes that experienced the largest sequential lead-time increases were:
- Logic, up 34.3%
- Transistors, up 33.3%
- Programmable logic, up 25.6%
- Memory, up 25.2%
- Signal circuits, up 16.4%
- Microcontrollers and processors, up 14.6%
In Q2, the top five part classes for lead time growth are projected to be:
- RF and microwave, up 31.5%
- Transistors, up 28.3%
- Optoelectronics, up 28.2%
- Trigger devices, up 25.4%
- Programmable logic, up 21.1%
Amid the general rise in semiconductor lead times in Q1 and Q2, buyers should shift their focus from passive monitoring to active supply assurance. The most important step is to prioritize coverage on the categories showing the fastest sequential tightening, especially RF and microwave, transistors, optoelectronics, trigger devices, programmable logic and logic. Buyers should lock in requirements earlier, extend visibility with suppliers, and build inventory for critical programs before lead times extend further.
Jonathan Cassell is the lead analyst for Supplyframe Commodity IQ