The Taiwan Semiconductor Manufacturing Company (TSMC) continues to be the world's largest chip foundry in an industry that includes photomask manufacturing and semiconductor assembly. The firm commands 35% of the market, according to Counterpoint Research, which also lists that Intel is the second biggest company in the industry. The research firm outlines Intel's progress with its 18A chip and the Foveros packaging technologies. Samsung continues to face yield problems with its chip manufacturing technologies, while AI demand has pushed the industry to generate $72.3 billion in revenue.
TSMC Reigns Supreme In The Foundry 2.0 Industry, Says Research Firm
Like CounterPoint Research, TSMC also defines the foundry business it operates in as Foundry 2.0. This business model includes non-chip fabrication operations such as packaging and photomask manufacturing along with traditional chip fabrication. Photomask is an essential component of the fabrication process as it allows chip manufacturers to transfer the design to the wafer.
CounterPoint's research report suggests that TSMC commanded a 35% market share of the $72.3 billion Foundry 2.0 market in Q1 2025. This meant that percentage-wise, the firm's share remained static over the Q4 2024 figures and marked a 0.9 percentage point annual increase.
However, Intel, which is still the world's largest integrated chip manufacturer, gained 0.6 percentage points of market share over Q4 and lost 0.3 points over the year-ago quarter. The latest data makes the firm the second-largest chip manfuacturer worldwide when it comes to the Foundry 2.0 industry.
According to CounterPoint, TSMC's lead is due to the orders that the firm is experiencing from AI companies and due to its leading-edge manufacturing processes. While Samsung also operates a contract semiconductor manufacturing business in the leading-edge segment of the industry by offering processes such as 3-nanometer, its yields are widely thought as the biggest restraining factor for mass market adoption.
On the other hand, TSMC ships thousands of wafers each month with consistency and is set to enter 2-nanometer mass production later this year. TSMC also claims to be the world's largest photomask manufacturer, and with the photomask segment also being part of Foundry 2.0, the firm is able to dominate the industry.
Crucially, AI chip demand has also had an affect on the chip packaging industry. AI chips require advanced packaging, and while TSMC primarily packages its chips, the firm has faced constrained packaging capacity. As a result, others, such as ASE and UMC have stepped up to fill the gap. However, TSMC's position in the packaging industry also allows it to gain a dominant position in the Foundry 2.0 industry.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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