Taiwan Semiconductor Manufacturing Company (TSMC) has assumed a leading role in the semiconductor foundry market across the world. The market share of TSMC also shot up to 38 % in the second quarter of 2025, compared to 31 % in the same quarter a year earlier.
This significant profit is possible at a time when foundry industry revenues had increased 19 % on a year over year basis, a clear indication that TSMC is riding a large industry wave fueled by technology and geopolitical demand.
The driving force of TSMC is the skyrocketing demand for applications of artificial intelligence. Transistors were compared to AI to which sophisticated manufacturing technologies and even novel sectors of packaging are needed and TSMC has been on the forefront of both.
More powerful and energy efficient processors can be packaged with advanced chip packaging, and these products are in high demand by customers constructing server farms, high-end graphics, and also edge devices.
As the rate of adoption speed of AI rises, prime clients are scrambling to buy capacity at the latest process node and most of these customers are opting towards TSMC because of its reliability and proven track record of offering leading solutions.
The constant policy backing in China is also another major factor whereby government subsidies are driving an expanded FDI pull in of foundry business across the region. TSMC is in a good place to take advantage of the Chinese drive toward increased self-sufficiency and national champions, as it continues to be a primary provider of next-generation chip solutions to both domestic and international brands.
According to Counterpoint Research, these issues are expected to push the sector revenue into single digit gains even in the third quarter.
Unlike the jump that was made by TSMC, most other leading foundries, such as Texas Instruments and Intel, made minimal changes in their market portions, with their share at 6 each. The share of Infineon and Samsung grew marginally, highlighting just the extent to which the competitive situation has become lopsided.
The technical leadership and customer loyalty has been successful in increasing the gap between TSMC and the other players, compelling the competitors to lose ground with both the development of advanced nodes and packaging expertise.
TSMC has a good future. The increasing relevance of AI will only benefit such foundries that have the capacity to deliver to the head of the pack, not necessarily in terms of conventional chip performance, but also in the innovative packaging that links many technologies in a single package.
However, counterpoint analysts forecast the next several quarters as a driver of this two-engine AI technology, and healthy demand in major world markets.
