Driven by AI demand and Chinese subsidies, Taiwan Semiconductor's market share surged to 38% in Q2, taking the lead
In the second quarter of 2025, Taiwan Semiconductor's market share in the semiconductor foundry market reached 38%, an increase of 7 percentage points year-on-year, mainly driven by demand for artificial intelligence and China's subsidy policies. The overall wafer foundry revenue in the industry grew by 19% year-on-year. Revenue is expected to continue to grow in the third quarter, with Taiwan Semiconductor maintaining its leading position in advanced processes and packaging. The market share of other foundry manufacturers mostly remained stable or slightly declined
According to data from Counterpoint Research, Taiwan Semiconductor (TSM.US) saw its semiconductor foundry market share soar to 38% in the second quarter of the 2025 calendar year, an increase of 7 percentage points year-on-year, compared to 31% in the same period last year. This growth is attributed to a 19% year-on-year rise in overall wafer foundry revenue, primarily driven by strong demand for advanced processes and packaging technologies due to artificial intelligence, while the pull-in effect caused by China's subsidy policies also contributed significantly. Counterpoint predicts that wafer foundry revenue will continue to grow in the third quarter of 2025, achieving a moderate single-digit increase.
Counterpoint senior analyst William Li pointed out that as the critical role of advanced packaging technology in enhancing chip performance becomes increasingly prominent, chip designers will increasingly rely on advanced packaging to improve solution performance. Given TSMC's current technological leadership and solid customer relationships, it is expected that the company will not only continue to lead in advanced process nodes but will also maintain a dominant position in advanced packaging in the future.
In comparison with peers, most other foundry manufacturers (including IDM outsourcing shares) maintained or slightly decreased their market shares in the second quarter: Texas Instruments (TXN.US) and Intel (INTC.US) both stabilized at a 6% market share; Infineon Technologies dropped slightly from 6% to 5%, while Samsung fell from 5% to 4%.
Counterpoint senior analyst Jake Lai analyzed that the traditional peak season effect in consumer electronics, accelerated AI application orders, and China's existing subsidy policies will be the main driving forces in the third quarter
