February 11, 2025 /SemiMedia/ — The global semiconductor foundry market is projected to grow 22% year-over-year in 2024, marking a strong recovery from 2023, driven primarily by surging demand for advanced process nodes, according to a report by Counterpoint Research. The expansion is fueled by the accelerated adoption of AI applications in data centers and edge computing.

TSMC, the industry leader, has benefited from strong demand for its 5/4nm and 3nm nodes. The development of advanced packaging technologies, such as CoWoS, has further propelled industry growth. The report noted that AI will remain the key driver for the foundry sector in 2025, with overall revenue expected to grow by up to 20% for the year. Additionally, a rebound in consumer electronics, networking equipment, and cellular IoT demand is expected to support market expansion.

In the advanced node segment, utilization rates for 3nm and 5/4nm processes are projected to remain high, buoyed by AI chip demand from Nvidia and flagship smartphone shipments from Apple, Qualcomm, and MediaTek.

By contrast, the recovery of mature nodes (28/22nm and above) is expected to be slower, constrained by weak demand in consumer electronics, networking, automotive, and industrial markets. The 8-inch wafer segment may lag behind the 12-inch segment due to its heavier reliance on automotive and industrial applications. Inventory adjustments in the automotive semiconductor sector are likely to extend into the first half of 2025, while high inventory levels at IDMs such as Infineon and NXP could lead to reduced outsourcing to foundries, adding further pressure on utilization rates.

Looking ahead to 2025, Counterpoint Research forecasts steady growth in the foundry sector, with a compound annual growth rate (CAGR) of 13%-15% between 2025 and 2028. Growth will be driven by increasing adoption of 3nm, 2nm, and smaller nodes, along with advanced packaging technologies like CoWoS and 3D packaging. As demand for high-performance computing (HPC) and AI applications continues to rise, TSMC is expected to maintain its technological leadership and further strengthen its market position.