tsmc's dominance: advanced processes fuel foundry surge
taipei, Tuesday, 11 March 2025.
trendforce reports a polarized foundry market in q4 2024. tsmc’s advanced process tech significantly boosted the top 10 global foundries’ production value, hitting a new record. tsmc captured 67% of the market with $26.85 billion in revenue. samsung foundry followed, but its revenue declined by 1.4%. the surge highlights the increasing demand for advanced chips in ai servers and smartphones.
foundry market dynamics
The global foundry industry demonstrated a split performance in Q4 2024 [1][8]. Advanced process nodes experienced robust demand, fueled by AI servers, flagship smartphone application processors, and new PC platforms [1]. This offset a slowdown in mature process demand [1][8]. The top 10 foundries collectively achieved nearly 10% quarter-over-quarter revenue growth, reaching $38.48 billion [1]. This marked a new industry record [1].
tsmc’s financial performance
TSMC’s February sales reached NT$260.0 billion (approximately $7.91 billion), a 43.1 percent increase from February 2024 [3]. The company’s first two months of 2025 generated sales of NT$553.3 billion (roughly $16.82 billion), a 39.2 percent rise compared to the same period in 2024 [3]. This growth indicates sustained demand for AI and high-performance computing processors, areas where TSMC holds a leading production position [3].
u.s. expansion and government support
TSMC is set to construct a third factory in Phoenix, Arizona, adding to its existing facilities [4]. The total investment across these three plants is projected to exceed $65 billion [4]. The U.S. government has preliminarily agreed to award TSMC $6.6 billion in grants and up to $5 billion in loans for these construction efforts [4]. This funding is part of the 2022 Chips and Science Act, which allocated $39 billion in grants and $75 billion in loans and guarantees [4].
implications for tsmc stock
TSMC’s strong performance and strategic expansions, bolstered by government incentives, suggest a positive outlook for its stock (TSM:NYSE). The company’s dominance in advanced process technologies and its proactive capacity expansion in response to growing demand, especially in the AI sector, position it favorably [1][3][4]. Geopolitical factors, such as the U.S. CHIPS Act, also reduce risks and enhance its market leadership [4].