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- The semiconductor “Foundry 2.0” market’s revenue climbed 16% YoY to $320 billion in 2025, driven by sustained strong demand for AI chips from manufacturing as well as packaging processes.
- TSMC the world’s largest pure play foundry revenue grew a massive 36% YoY
- Non-TSMC foundries’ revenue grew a modest 8% YoY in 2025 mostly from a surge from Chinese vendors driven by domestic localization efforts.
- The OSAT sector continued to expand with 10% YoY growth in 2025, largely due to advanced packaging demand, with ASE growing at a above average rate, becoming the second largest player by revenue behind TSMC
Seoul, Beijing, Berlin, Buenos Aires, Fort Collins, Hong Kong, London, New Delhi, Taipei, Tokyo – Mar. 30, 2026
The semiconductor industry has formally entered the Foundry 2.0* era, a phase defined by the deep integration of manufacturing, assembly and testing, profitably driven by the global AI boom. According to Counterpoint Research’s latest Foundry Market Supply Tracker, the global Foundry 2.0 market’s revenue grew to $320 billion at 16% YoY.
The double-digit growth was largely driven by steady demand for AI GPUs and AI ASICs across both manufacturing of advanced process and advanced packaging, with pure-play foundries like TSMC leading the AI-driven momentum and key OSAT vendors benefiting from spillover orders.
Pure Play Foundries Growth Driven by TSMC, SMIC & Nexchip
TSMC continues to anchor the Foundry 2.0 landscape, although growth moderated in Q4 2025 to 25% YoY, down from the 40%+ levels seen earlier in the year. This was largely expected, given a higher base in HPC and typical seasonality in consumer demand. For the full year, revenue still grew a strong 36% YoY.Commenting on TSMC’s performance and outlook for 2026, Senior Analyst, Jake Lai, highlighted, “More importantly, the discussion around TSMC is starting to shift. The key question is no longer just wafer capacity, but system-level integration. As front-end scaling becomes more constrained, bottlenecks are increasingly moving to the back end. In this context, advanced packaging — particularly CoWoS — is becoming a key differentiator, and will likely be one of the main variables driving TSMC’s performance into 2026.”
Overall, non-TSMC pure play foundries delivered a modest 8% YoY growth in 2025. Samsung, the biggest player here alongside UMC, VIS, SMIC, Nexchip, Global Foundry and others.
Samsung had a mixed year but is poised to grow from this point in 2026 as some of the key potential customers look to diversify.
Commenting on Samsung’s performance and outlook, Research Director, Tom Kang noted, “Demand for its 4nm node has been relatively solid, supporting better pricing, and the ramp of 2nm should help it secure higher-value designs, particularly in AI and mobile. Taken together, both volume and ASP improvement suggest Samsung is bound to grow in 2026.”
Among other players, Chinese foundries such as SMIC (+16% YoY), Nexchip (24% YoY) were the standout fabs supported by ongoing localization efforts. This trend is unlikely to change in the near term, and double-digit growth should remain sustainable in 2026.
Non-Memory IDMs Rebound thanks to Texas Instrument, Infineon
The broader semiconductor cycle is also stabilizing. Non-memory IDMs have largely moved past the worst of their inventory corrections, with a return to growth in H2 2025. Texas Instruments, for example, posted a double-digit rebound (+13% YoY) while Infineon (+5% YoY) in 2025. This recovery should provide a more stable baseline for industry growth heading into 2026.OSAT Remains Hot Driven by TSMC, ASE for Advanced Packaging from CoWoS to 2.5D/3D
The OSAT segment grew 10% YoY in 2025, reflecting continued strength in advanced packaging. With TSMC’s internal capacity still tight, players such as ASE/SPIL and Amkor are increasingly absorbing spillover demand, particularly from AI-related applications.Looking ahead, CoWoS-S and CoWoS-L will remain central to the advanced packaging roadmap. Given ongoing capacity constraints at TSMC, AI customers are actively securing additional capacity through long-term partnerships with OSAT vendors. As a result, industry capacity for advanced packaging could expand by roughly 80% YoY in 2026. Unlike previous cycles, this growth is more directly tied to system-level demand from AI platforms (e.g., server CPUs, GPUs, and custom ASICs), which should support a more sustained expansion trajectory for OSAT players.
Commenting on the AI driven advanced packaging trends, Senior Analyst William Li, noted, “Advanced packaging is no longer just a supporting step but becoming a gating factor for AI deployment. As customers move to lock in capacity, OSAT vendors are structurally better positioned than in past cycles, with growth visibility extending over multiple years.”
What is Foundry 2.0?
The traditional “Foundry 1.0” definition – focused solely on chip manufacturing – is no longer sufficient to capture current sector dynamics. Counterpoint’s “Foundry 2.0” definition expands the scope to include pure-play foundries, non-memory Integrated Device Manufacturers (IDMs), Outsourced Semiconductor Assembly and Test (OSAT) companies and photomask suppliers. The transition to Foundry 2.0 reflects a gradual shift away from the traditional pure-play model toward a more integrated ecosystem. In practice, this means closer alignment across design, manufacturing, and packaging, ultimately improving system-level efficiency and total cost of ownership (TCO).https://counterpointresearch.com/en...b-to-a-Record-320-Billion-in-Revenues-in-2025