With AI continuously driving the demand for high-end logic process chips and increasing the penetration of high-priced, high-bandwidth memory (HBM), the global semiconductor market is expected to achieve double-digit growth by 2025.
The semiconductor supply chain, covering design, manufacturing, testing, and advanced packaging, will create new growth opportunities through collaboration across upstream and downstream industries.
- AI-Driven Rapid Growth Will Continue Next Year
The global semiconductor market is expected to grow by 15% in 2025.
Memory is expected to surge by more than 24%, primarily due to the increasing penetration of high-end products like HBM3 and HBM3e needed for AI accelerators, as well as the next-generation HBM4 expected to launch in the second half of 2025.
The non-memory sector is expected to grow by 13%, driven by strong demand for advanced node ICs in AI servers, high-end mobile ICs, and WiFi7.
The mature node IC market is expected to recover with the support of a rebound in the consumer electronics market. - IC Design Market in Asia Pacific Heating Up, Expected to Grow by 15% in 2025
The IC design market in Asia Pacific is diverse, with applications spanning globally. Key chips include smartphone APs, TV SoCs, OLED DDICs, LCD TDDIs, WiFi, PMICs, MCUs, and ASICs. As inventory levels stabilize, personal device demand rebounds, and AI computing extends to various applications, overall IC design demand is expected to increase. - TSMC Continues to Lead Foundry 1.0 and Foundry 2.0 Industries
According to the traditional definition of Foundry 1.0, TSMC’s market share is expected to steadily rise from 59% in 2023 to 64% in 2024 and 66% in 2025, far outpacing competitors.
In 2023, TSMC’s market share in Foundry 2.0 (including wafer foundry, non-memory IDM manufacturing, packaging and testing, and photomask manufacturing) was 28%.
As AI-driven advanced node demand increases sharply, TSMC’s market share in Foundry 2.0 is expected to grow rapidly in 2024 and 2025, demonstrating a comprehensive competitive advantage in both traditional and modern industry structures. - Strong Demand for Advanced Nodes and Accelerated Wafer Foundry Expansion
Driven by AI demand, advanced processes (below 20nm) are expanding rapidly. TSMC continues to build 2nm and 3nm fabs in Taiwan, with new fabs being built for 4/5nm in the U.S., set to begin mass production soon.
Samsung, leveraging its early entry into the GAA generation, is ramping up its 2nm process in Hwaseong, South Korea.
Intel, under its new strategic plan, is focusing on 18A process development and plans to attract more external customers in the coming years.
Overall, the wafer manufacturing annual growth rate is expected to reach 7% in 2025, while the advanced process capacity will grow by 12% annually, with average capacity utilization expected to remain above 90%. The AI-driven semiconductor boom will continue. - Mature Node Market Heating Up, Capacity Utilization Above 75%
Mature nodes (22nm-500nm) are widely used across industries such as consumer electronics, automotive, and industrial control.
In 2025, demand is expected to recover after this year’s adjustments and oversupply, driven by inventory replenishment in consumer electronics, automotive, and industrial control sectors.
The average capacity utilization of 8-inch wafer fabs is expected to rise from 70% in 2024 to 75%, while the average capacity utilization of 12-inch mature nodes is expected to increase to over 76%.
Wafer foundry capacity utilization is expected to increase by 5% on average in 2025. - 2025 Will Be a Key Year for 2nm Technology
With the three major foundries gradually entering 2nm mass production, 2025 will be a key year for 2nm technology.
TSMC is actively expanding its Hsinchu and Kaohsiung fabs, with mass production expected in the second half of the year.
Samsung, continuing its trend, is expected to enter mass production earlier than TSMC.
Intel, after strategic adjustments, is focusing on the 18A process with backside power delivery network (BSPDN) and plans to prioritize this in the coming years.
Under 2nm technology, balancing performance, power consumption, and unit area cost will present critical optimization challenges.
In particular, 2nm technology will support the mass production of key products like smartphone APs, mining chips, and AI accelerators, with yield rates expected to improve. Expansion pace will become a market focus. - Semiconductor Assembly and Testing Industry Restructuring
Due to geopolitical influences, the global semiconductor assembly and testing (OSAT) landscape is undergoing restructuring.
Under the “semiconductor sovereignty” policy, mainland China’s wafer foundry mature node capacity continues to grow, and the downstream OSAT industry is expanding, forming a complete manufacturing ecosystem.
Taiwanese companies are showing another aspect of industry advantage by accelerating capacity expansion in Taiwan and Southeast Asia, while deepening AI chip advanced packaging technology.
In 2025, mainland China’s OSAT market share will continue to rise, and Taiwanese companies will strengthen their packaging advantage in high-end chips like AI GPUs. The overall assembly and testing industry is expected to grow by 9% in 2025. - Advanced Packaging: FOPLP Layout and CoWoS Capacity Doubling
As the demand for semiconductor wafer functionality and performance continues to rise, advanced packaging technology is becoming increasingly important.
FOPLP is expected to grow rapidly from 2025, primarily using glass substrate processes for smaller analog chips such as PMIC and RF. After several years of technological accumulation, FOPLP is expected to enter the AI chip market, which requires larger packaging areas, and achieve higher technical thresholds for glass substrate products.
Moreover, driven by demand from high-performance computing customers such as NVIDIA, AMD, AWS, Broadcom, and cloud service providers (CSPs), TSMC’s CoWoS capacity will continue to double, from 330,000 wafers in 2024 to 660,000 wafers in 2025, with a 100% annual growth rate. The CoWoS-L product line will be the main growth driver, with an annual growth rate of 470%.
Taiwan’s equipment supply chain, including key process equipment manufacturers for wet etching, dispensing, and die pick-up, will see more growth opportunities in this wave of capacity expansion.
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