Digital Transformation Market Outlook:
Digital Transformation Market size was USD 1.7 trillion in 2025 and is estimated to reach USD 12.5 trillion by the end of 2035, expanding at a CAGR of 22.1% during the forecast period, i.e., 2026-2035. In 2026, the industry size of digital transformation is assessed at USD 2 trillion.
The automation and smart infrastructuring requirements are primarily contributing to digital transformation worldwide. The growth of the semiconductor industry is driving digital transformation, as advanced chips power AI, IoT, 5G, and cloud computing. In turn, the rising adoption of these digital solutions in industries promotes further demand for faster and more efficient semiconductors, building a cycle of mutual growth. This can be observed in the latest Observatory of Economic Complexity (OEC) report, where global trade of semiconductor devices saw a minor rise in 2023, surging by 0.5% to USD 155 billion as compared to USD 154 billion in 2022.
The favorable government investments are also supporting the growth of digital infrastructure. For instance, the CHIPS Act is significantly accelerating the growth of the digital transformation market on a global scale by strengthening the U.S. semiconductor ecosystem, a critical component for modern digital technologies. The CHIPS Act embarks on the largest federal commitment to the U.S. semiconductor sector to date, assigning USD 13 billion over five years for R&D initiatives. Of this, USD 11 billion is directed through the Department of Commerce and USD 2 billion through the Department of Defense. The funding assures a steady supply of advanced chips necessary for AI, IoT, cloud computing, industrial automation, and other next-generation digital solutions. This large-scale federal investment not only bolsters domestic innovation but also encourages international technology partnerships and supply chain resilience, creating a ripple effect that drives the adoption of digital transformation initiatives worldwide.
