Global semiconductor foundry 2.0 market revenue rose by 13% year-on-year (YoY) in the first quarter (1Q 2025) to $72.29 billion, largely driven by the surging demand for AI and high-performance computing (HPC) chips, which fueled the need for advanced nodes (3nm, 4/5nm) and advanced packaging (e.g. CoWoS), according to Counterpoint Technology Market Research’s Foundry Revenue & UTR by Node Tracker Q1 2025.

The traditional semiconductor foundry (Foundry 1.0), which focused primarily on chip manufacturing, is no longer sufficient to highlight sector dynamics, which are now driven by AI trends and related system-level optimization. Companies are moving from being part of the manufacturing line to a technology integration platform. This will ensure tighter vertical alignment, faster innovation, and deeper value creation. Thus, we are including pure foundry, non-memory IDM, OSAT, and photomask making vendors in foundry 2.0 vs. only pure foundry players in our foundry 1.0 definition.

“TSMC leads the pack, with its market share growing to 35% and achieving YoY revenue growth of mid-30% thanks to its strong position in leading-edge processes and high-volume AI chip orders. Intel and Samsung Foundry trail behind, with Intel gaining traction via 18A/Foveros and Samsung facing yield challenges despite 3nm GAA development,” said Associate Director Brady Wang.

OSAT vendors represent the next critical layer of the Foundry 2.0 supply chain after pure foundry players, especially as demand for advanced packaging surges. The OSAT sector shows signs of recovery, growing nearly 7% YoY in Q1 2025 as ASE, SPIL, and Amkor ramp up advanced packaging capacity. These vendors benefit from TSMC’s overflow demand for AI-related CoWoS but remain constrained by yield and scale.

However, non-memory IDMs such as NXP, Infineon, and Renesas face ongoing softness in the automotive and industrial segments, with a 3% revenue decline in Q1 2025. Despite inventory normalization, a sustained recovery will likely be pushed back to H2 2025. On the other hand, Photomask vendors are buoyed by EUV adoption at 2nm and rising complexity in AI/Chiplet design.

“AI adoption remains the centerpiece of semiconductor growth, reshaping priorities across the foundry supply chain and reinforcing TSMC and packaging players as central beneficiaries in this new wave,” said Senior Analyst William Li said.

Looking ahead, the Foundry 2.0 ecosystem is poised to evolve from a linear manufacturing model into a seamlessly integrated value chain. This transformation will deepen synergies across design, manufacturing, and advanced packaging, ushering in a new era of innovation, especially as AI, chiplet integration, and system-level co-optimization continue to redefine competitiveness in the semiconductor industry.

By: DocMemory
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