Semiconductor technology trends and predictions 2026

As we look ahead to 2026, we see intelligence increasingly being embedded within physical products and everyday interactions. This shift will be powered by rapid adoption of digital identity technologies such as near-field communication (NFC) alongside AI and agentic AI tools that automate workflows, improve efficiency, and accelerate innovation across the product lifecycle.

The sharp rise in NFC adoption, with 92% of brands already using or planning to use it in products in the next year, signals appetite to unlock the true value of the connected world. Enabling intelligence in new places gives brands the opportunity to bridge physical and digital experiences for positive social, commercial, and environmental outcomes.

Regulatory milestones, such as the phased rollout of the EU Digital Product Passport, with organizations, sustainability pressures, and the need to ensure transparency to drive trust will be key catalysts for edge and item-level AI.

In the year ahead, companies will unlock significant benefits in customer experience, sustainability, compliance, and supply chain efficiency by embedding intelligence from the Edge to individual items and devices.

Let’s dig deeper into the technology trends shaping 2026.

Edge AI is the fastest growing frontier in semiconductors
Driven by the shift from pure inference to on-device training and continuous, adaptive learning, 2026 will see strong growth in Edge AI demand.

Specialised chips such as low-power machine learning accelerators, sensor-integrated chips and memory-optimised chips will be used in consumer electronics, smart cities, and Industrial IoT.

New packaging approaches will become the proving ground for performance, cost efficiency, and miniaturisation in intelligent Edge devices.

Item-level intelligence is accelerating digital transformation
Intelligence will not stop at the device. Over the next 12 months, low-cost sensing, NFC and edge AI will push computation down to individual items.

The capability to gather real-time data at item level in a move away from batch data, combined with AI will enable personalised experiences, automation, and predictive analytics across smart packaging, healthcare and wellness products, retail, and logistics.

Applications will include real-time tracking, AI-driven personalisation, automated supply chain optimisation, predictive maintenance, and dynamic authentication.

This marks a fundamental shift as every item becomes a data node and source of intelligence.

Connected consumer experiences are driving breakthrough NFC adoption
NFC adoption is accelerating alongside the explosion of connected consumer experiences – from wearables and hearables to smart packaging, digital keys and wellness applications. NFC will become a central enabler of trust, personalisation and seamless connectivity.

As consumers increasingly expect intelligent product interaction, for example, to track provenance or engage with wellness apps to build a personalised profile and derive usable insights, the opportunity for NFC is clear.

Brands will favour ultra-low-cost and thin NFC solutions – where flexible and ultra-thin semiconductors excel – to deliver frictionless, high-quality consumer experiences.

Heterogeneous integration will unlock design innovation
Heterogeneous integration through chiplets, interposers, and die stacking will become the preferred approach for achieving higher density and improved yields. This is a key enabler for miniaturization and differentiated form factors in enabling customisation for edge AI.

At the same time, the rise of agentic AI-driven EDA tools will lower design barriers and fuel cost-effective innovation through natural language tools. This will ignite startup growth and increase demand for agile, cost-effective foundry design services.

Compliance shifts from cost to competitive advantage
New regulatory frameworks such as Digital Product Passports, circularity, and Extended Producer Responsibility (EPR) will require authentication, traceability, and lifecycle visibility.

Rather than a burden, this presents a strategic opportunity for competitive advantage and market expansion. Embedded digital IDs with NFC capability allow businesses to secure product authentication, meet compliance and governance expectations, and unlock new value in consumer engagement.

As compliance moves from paper systems to embedded intelligence, the opportunity will expand across consumer goods, industrial components, and supply chains.

Energy constraints are driving efficiencies in semiconductor manufacturing
As semiconductor manufacturing scales to serve AI demand, growing energy consumption in data centers is forcing industry to focus on power-efficient architectures.

This is accelerating a shift away from centralized compute towards fully distributed sensing and intelligence at the edge. Edge AI architectures are designed to process data locally rather than transmit it upstream and will be essential to sustaining AI growth without compounding energy constraints.

The capability to establish and scale domestic manufacturing will also play a critical role in cutting embedded emissions and enabling more sustainable and efficient supply chains. Semiconductor manufacturing facilities, known as foundries, will be evaluated on their energy and material efficiency, supported by circular design principles such as reuse, recycling, and recoverability.

Companies that can demonstrate strong environmental commitments will gain long-term competitive advantage, attracting customers, partners, and skilled talent.

Intelligence right to the edge
These trends point to a definitive shift as intelligence moves dynamically into the physical world. Compute will become increasingly distributed and identity embedded, unlocking efficiencies and delivering real-time insights into the fabric of products, infrastructure, and supply chains.

Semiconductor manufacturing will sit at the heart of the next phase of digital transformation. Flexible and ultra-thin chip technologies will enable new classes of innovations, from emerging form factors such as wearables and hearables to higher functional density in constrained spaces, alongside more carbon-efficient manufacturing models.

The implications for businesses are clear. Companies can accelerate innovation and deepen consumer engagement and turn compliance into a source of competitive advantage. Those that embed connected technologies into their 2026 strategy will be those that are best positioned to take advantage of the digital transformation opportunities ahead.

-- Richard Price, CTO and Co-Founder, Pragmatic Semiconductor.