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AI Boom Fuels Foundry Surge: TSMC Leads Charge
23 Dec
Summary
- Global foundry revenue grew 17% year over year in Q3.
- TSMC's Q3 revenue surged 41%, capturing 39% market share.
- Capacity constraints and advanced node demand pose future challenges.
Global foundry revenue experienced a substantial 17% year-over-year increase in the third quarter, reaching $84.8 billion. This growth was primarily driven by the booming artificial intelligence sector, which necessitated heavy utilization of advanced manufacturing processes. Taiwan Semiconductor Manufacturing (TSMC) emerged as a standout performer, reporting a 41% surge in revenue compared to the previous year. The company successfully expanded its market share to 39%.
TSMC's impressive gains were fueled by a rapid ramp-up in its 3nm production capabilities and near-full utilization of its 4nm and 5nm lines. This heightened demand is closely linked to the needs of major AI chip designers such as Nvidia, AMD, and Broadcom. In contrast, other foundries saw much more modest growth, with a 6% increase.
Analysts note that the industry is now facing significant capacity challenges, with advanced nodes and CoWoS packaging operating at their limits. While AI demand remains robust, physical production constraints are anticipated to potentially slow growth as the industry moves closer to 2026, highlighting the need for increased manufacturing capacity.
