• The foundry industry is expected to achieve 20% revenue growth in 2025, driven by strong AI demand benefiting TSMC and a gradual recovery in non-AI semiconductor applications.

• The industry utilization rate (UTR) for leading-edge nodes, including 3nm and 5/4nm, remains strong in 2025, while UTR recovery for mature nodes is sluggish due to weak cyclical demand.

• The industry’s revenue CAGR is projected to remain steady at 13-15% from 2025 to 2028. Long-term growth will be driven by leading-edge nodes, such as 3nm and 2nm, along with advanced packaging technologies.
  

The global foundry industry wrapped up 2024 with an impressive 22% YoY growth, marking a strong recovery and expansion phase after 2023. This growth was primarily driven by surging demand for leading-edge nodes, fueled by the rapid adoption of AI applications across data centers and edge computing. Key players such as TSMC capitalized on this momentum with robust contributions from 5/4nm and 3nm nodes, while advancements in packaging technologies such as CoWoS further bolstered industry growth.

Looking ahead, the foundry industry is expected to achieve around 20% revenue growth in 2025, driven by continued strong AI demand benefiting TSMC. Besides, a gradual recovery in non-AI semiconductor applications, like consumer electronics, networking, and IoT segments, is expected to support the industry’s growth trajectory, further solidifying the industry’s long-term potential.

The industry utilization rate (UTR) for leading-edge nodes, including 3nm and 5/4nm, remains strong in 2025, driven by robust AI demand from NVIDIA and solid flagship smartphone demand from Apple, Qualcomm, and MediaTek. In contrast, the UTR recovery for mature nodes (28/22nm and above) is relatively sluggish due to weak end-market demand across consumer electronics, networking, automotive, and industrial segments. The recovery of 8-inch UTR is expected to lag even further compared to mature 12-inch nodes, largely due to its significant exposure to automotive and industrial applications. We expect inventory correction in the automotive segment to persist through H1 2025, delaying recovery in this sector. Besides, high inventory levels at global IDMs, including Infineon and NXP, are likely to result in reduced outsourcing orders to mature node foundries, further pressuring mature node UTR. Overall, we expect mature node foundries to experience a comparatively modest UTR recovery relative to TSMC in 2025.

Beyond 2025, the global foundry industry is poised for sustained growth, with a projected revenue CAGR of 13-15% from 2025 to 2028. This long-term expansion will be anchored by advancements in leading-edge nodes, such as 3nm, 2nm and below, and the accelerating adoption of advanced packaging technologies, including CoWoS and 3D integration. These innovations will remain the primary growth engines for the industry over the next 3-5 years, driven by increasing demand for high-performance computing and AI applications. TSMC is expected to continue its leadership, shaping industry trends and capitalizing on its technological edge.