This surge is driven by demand for advanced technologies in artificial intelligence (AI) applications and cryptocurrency mining.
IDC senior semiconductor research manager Galen Zeng stated that TSMC is expected to solidify its leadership in the global foundry market, increasing its share to 67 per cent in 2025, up from 64 per cent this year. Using a broader definition of the foundry market, including chip packaging and testing, TSMC’s market share is forecasted to rise from 33 per cent to 36 per cent.
TSMC introduced a new classification, "Foundry 2.0," which includes integrated device manufacturers (IDMs) like Intel but excludes memory chipmakers. IDC noted that TSMC would remain the dominant player under either the traditional "Foundry 1.0" or the expanded "Foundry 2.0" definitions.
The company is fast-tracking production of cutting-edge 3-nanometer, 4-nanometer, and 5-nanometer chips to meet surging customer demand. This involves deploying a “super-hot-run” production cycle, the shortest timeline for rush orders. Utilisation rates for these advanced nodes have exceeded 95 per cent.
TSMC plans to add 70,000 advanced wafers per month to its existing capacity, covering 2-nanometer through 5-nanometer technologies. Additionally, the company is expected to double its advanced packaging capacity—essential for AI chips like those supplied to Nvidia—from 330,000 to 660,000 units next year. Despite this expansion, IDC anticipates ongoing CoWoS (chip-on-wafer-on-silicon) packaging capacity shortages.
IDC projects the global semiconductor industry's production value will grow 15 per cent, reaching $782 billion, while the foundry segment is expected to grow by 20 per cent.
Samsung Electronics, TSMC’s primary rival, is poised to ramp up production of 2-nanometer technology next year, ahead of TSMC by 3-6 months. However, Samsung faces significant challenges with low yield rates, which may hinder its competitiveness.
TSMC, meanwhile, plans to enter volume production of its 2-nanometer chips in the latter half of next year. A small initial shipment to Apple Inc. is anticipated by late 2025 or early 2026.
IDC said that TSMC’s aggressive capacity expansion and its ability to dominate both traditional and expanded market definitions position it as an enduring leader in the semiconductor industry. The continued rise in demand for AI and crypto applications ensures a strong growth trajectory, though challenges like packaging bottlenecks and competition from Samsung remain on the horizon.
