Racing ahead in Foundry 2.0, TSMC dominates AI chip demand, advanced packaging surges, and OSAT players like ASE scale, reshaping global semiconductor innovation and market dynamics.
The global semiconductor foundry market is entering the Foundry 2.0 era, driven by AI demand and advanced packaging innovations, as TSMC strengthened its position with Q3 revenue of $33.1 billion. According to Counterpoint Research, the third quarter of 2025 marked strong growth and supply tightness across leading-edge nodes.
Market share projections indicate TSMC’s continued dominance in Foundry 2.0, rising from 33% in 2024 to 39% in 2025, reflecting strong demand for leading-edge nodes and AI-focused chips. ASE and Intel maintain stable positions at 7% and 6%, respectively, while Samsung and other players show marginal shifts.
The “Others” category is expected to decline from 38% to 34%, signalling ongoing consolidation among top-tier foundries as AI-driven demand concentrates production with established leaders.
TSMC reportedly surpassed its guidance range of $31.8–$33 billion. In Q3, demand for 3nm and 4/5nm chips remained exceptionally high, with Apple, NVIDIA, and AMD driving utilisation at full capacity. The ramp-up in 3nm production and sustained high utilisation of 4/5nm nodes supported ongoing orders for AI GPUs, HPC systems, and flagship smartphones.
The company’s CoWoS-L advanced packaging expansion is projected to reach 100,000 wafers per month by end-2026, largely powered by NVIDIA GPUs and custom ASICs for Google, AWS, and Meta. TSMC’s broader packaging platforms, including CoWoS-R and InFO/SoIC, are also gaining traction in high-performance computing and networking segments.
Among OSAT players, ASE benefited from strong CoWoS demand, posting estimated Q3 revenue of $5 billion, up 9% YoY. This reflected overflow from TSMC’s orders and rising advanced packaging adoption for AI accelerators, networking ASICs, and next-gen smartphone SoCs.
Samsung and Intel are progressing in Foundry 2.0, but both face challenges. Smartphone chip shipments support Samsung’s growth, while success at the 2nm node and collaborations like Tesla will be key to attracting more customers.
Intel’s 18A process in Arizona, powering Panther Lake, is on a customer-commitment-driven ramp, with wafer allocations for clients expected to expand from 2026–2027. Stability and high utilisation at Intel’s advanced nodes will be critical to achieving profitability.
At mature nodes, 6/7nm utilisation declined slightly, and 12/16nm and 22/28nm lines moderated after earlier Wi-Fi 7-driven demand. 12-inch production showed relative resilience, while 8-inch lines remained constrained by automotive and industrial softness.
According to the report, the third quarter confirms the Foundry 2.0 transformation: foundries are becoming vertically integrated solution providers, combining wafer fabrication with advanced packaging design, while OSAT companies like ASE play a crucial role in scaling AI-capable chips.
The convergence of leading-edge nodes, advanced packaging, and AI demand is shaping the next wave of semiconductor innovation, spanning data centres, consumer electronics, and intelligent systems globally.
Counterpoint expects that AI and CoWoS-led packaging will continue to define market growth and industry structure well into 2026 and beyond.
